Curbs pull down services PMI
Source: Bloomberg News |
December 5, 2011, Monday
|
Print Edition
Print Edition
CHINA'S non-manufacturing industries contracted in November after the government's curbs on property and lending damped demand.
A purchasing managers' index for November fell to 49.7 from 57.7 the previous month, the China Federation of Logistics and Purchasing said on its website on Saturday. A reading above 50 indicates expansion. The gauge covers industries including construction, retail, and property.
Last Wednesday China's central bank reduced lenders' reserve requirements for the first time since 2008, ahead of a report that showed manufacturing contracted for the first time in almost three years. Premier Wen Jiabao has pledged to "fine-tune" economic policies to sustain growth amid a deepening debt crisis in Europe that threatens to trigger a global slump.
"Investment in infrastructure and real estate is playing a smaller role in driving the economy," Cai Jin, vice chairman of the logistics federation, said in Saturday's statement.
A new orders index for construction industries fell to 47.6, the data show.
Poly Real Estate Group Co, China's second-largest developer by market value, said on November 7 that its contracted sales in October fell 39 percent from a year earlier to 5.42 billion yuan (US$856 million).
The federation's gauge drops "sharply" in November every year and during the Chinese New Year holiday, indicating seasonal adjustments aren't being made appropriately, Lu Ting, a Hong Kong-based economist with Bank of America Corp said in a note last month.
Growth in China is slowing as government curbs cool the property market and Europe's crisis cuts demand for exports.
A manufacturing index released last week by the federation fell to 49.0 in November from 50.4 in October, the first contraction since February 2009. A separate PMI released by HSBC Holdings Plc and Markit Economics declined to 47.7, the lowest level since March 2009.
The People's Bank of China said last Wednesday it will reduce lenders' reserve requirements by 50 basis points effective today, a move that may add 350 billion yuan to the financial system, according to UBS AG. The cut signals China is at the beginning of monetary easing, said Qu Hongbin, a Hong Kong-based economist for HSBC.
A purchasing managers' index for November fell to 49.7 from 57.7 the previous month, the China Federation of Logistics and Purchasing said on its website on Saturday. A reading above 50 indicates expansion. The gauge covers industries including construction, retail, and property.
Last Wednesday China's central bank reduced lenders' reserve requirements for the first time since 2008, ahead of a report that showed manufacturing contracted for the first time in almost three years. Premier Wen Jiabao has pledged to "fine-tune" economic policies to sustain growth amid a deepening debt crisis in Europe that threatens to trigger a global slump.
"Investment in infrastructure and real estate is playing a smaller role in driving the economy," Cai Jin, vice chairman of the logistics federation, said in Saturday's statement.
A new orders index for construction industries fell to 47.6, the data show.
Poly Real Estate Group Co, China's second-largest developer by market value, said on November 7 that its contracted sales in October fell 39 percent from a year earlier to 5.42 billion yuan (US$856 million).
The federation's gauge drops "sharply" in November every year and during the Chinese New Year holiday, indicating seasonal adjustments aren't being made appropriately, Lu Ting, a Hong Kong-based economist with Bank of America Corp said in a note last month.
Growth in China is slowing as government curbs cool the property market and Europe's crisis cuts demand for exports.
A manufacturing index released last week by the federation fell to 49.0 in November from 50.4 in October, the first contraction since February 2009. A separate PMI released by HSBC Holdings Plc and Markit Economics declined to 47.7, the lowest level since March 2009.
The People's Bank of China said last Wednesday it will reduce lenders' reserve requirements by 50 basis points effective today, a move that may add 350 billion yuan to the financial system, according to UBS AG. The cut signals China is at the beginning of monetary easing, said Qu Hongbin, a Hong Kong-based economist for HSBC.
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