Industrial activity slows for 4th month
By Wang Yanlin |
August 2, 2011, Tuesday
|
Print Edition
Print Edition
The index gauging China's industrial activities declined for a fourth consecutive month in July, although it managed to stay above the line indicating expansion.
In contrast, a similar gauge by HSBC indicated contraction for the first time in a year.
The official Purchasing Managers' Index, a comprehensive gauge of manufacturing activities across the country, fell 0.2 percentage point from a month earlier to 50.7 percent in July, the China Federation of Logistics and Purchasing said yesterday.
The performance was the weakest since March 2009.
Meanwhile, the HSBC China Manufacturing Purchasing Managers' Index, which is slanted more towards privately-owned and export-oriented firms, settled at 49.3 in July, also a 29-month low signaling a deterioration in the manufacturing sector and down from June's 50.1.
A reading above 50 indicates expansion, below 50 contraction.
"Moderation in the official PMI shows that China's economy is cooling," said Zhang Liqun, a federation analyst. "The pace of moderation remains stable so far, but we have to look closely of the changing demand of consumption, investment and exports to avoid a sharp drop in economic vitality."
Liu Ligang, an analyst with the Australia and New Zealand Banking Group, said July's official PMI reinforced a trend of moderate economic growth under the weight of tightened monetary policy, although the rate turned out to be better than expected.
"As industrial production rebounded in June, we believe the PMI will start to climb in the coming months," Liu said, noting that the July PMI tended to be one of the weakest and could be followed by a strong rebound in August.
In contrast, a similar gauge by HSBC indicated contraction for the first time in a year.
The official Purchasing Managers' Index, a comprehensive gauge of manufacturing activities across the country, fell 0.2 percentage point from a month earlier to 50.7 percent in July, the China Federation of Logistics and Purchasing said yesterday.
The performance was the weakest since March 2009.
Meanwhile, the HSBC China Manufacturing Purchasing Managers' Index, which is slanted more towards privately-owned and export-oriented firms, settled at 49.3 in July, also a 29-month low signaling a deterioration in the manufacturing sector and down from June's 50.1.
A reading above 50 indicates expansion, below 50 contraction.
"Moderation in the official PMI shows that China's economy is cooling," said Zhang Liqun, a federation analyst. "The pace of moderation remains stable so far, but we have to look closely of the changing demand of consumption, investment and exports to avoid a sharp drop in economic vitality."
Liu Ligang, an analyst with the Australia and New Zealand Banking Group, said July's official PMI reinforced a trend of moderate economic growth under the weight of tightened monetary policy, although the rate turned out to be better than expected.
"As industrial production rebounded in June, we believe the PMI will start to climb in the coming months," Liu said, noting that the July PMI tended to be one of the weakest and could be followed by a strong rebound in August.
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