Major firms recovering but private firms feel the pinch
By Wang Yanlin |
April 2, 2012, Monday
|
Print Edition
Print Edition
MANUFACTURING activities in China's major state-owned enterprises seemed to regain their growth momentum last month while in private and export-oriented companies it continued to deteriorate, two surveys showed yesterday.
The official Purchasing Managers' Index, which is weighted toward state-owned enterprises, was 53.1 in March, a one-year high and up 2.1 points from a month earlier, the China Federation of Logistics and Purchasing said.
In contrast, the HSBC China Manufacturing Purchasing Managers' Index, which is slanted toward private and export-oriented companies, was 48.3 last month, down from February's 49.6 and falling at the second fastest pace in three years.
A reading of 50 separates expansion from contraction in both surveys.
"The official PMI data are much better than expected," said Liu Ligang, an economist with Australia and New Zealand Banking Group Ltd. "It shows China's manufacturing sector has had a quick rebound from the slowdown during the Spring Festival holiday, but seasonal factors alone can't explain such a strong jump."
Liu said the increase may dilute fears of a sharp moderation in China's economic growth in the first quarter - the figures are due to be released on April 13 - and may delay the introduction of more policy easing measures.
The federation said that more new orders contributed the most to the increase in the official PMI. Component indices showed new orders rose 4.1 points from a month earlier to 55.1, reflecting strong demand in industrial sectors such as machinery, automobiles and medical equipment.
Production in March picked up 1.4 points to 55.2.
However, it was the fifth successive month that the HSBC PMI had recorded a deterioration in private and export-oriented companies.
Qu Hongbin, chief economist for China at HSBC, said its survey confirmed a further slowdown of growth momentum, made worse by weakening export orders.
"As inflation pressures continue to ease, weaker export growth is likely to prompt easing measures," Qu said. "Once the easing measures filter through, growth is likely to start bottoming out in the second quarter and rebound modestly in the second half."
Qu said the reserve requirement ratio, the money banks must set aside as reserves, would be cut at least once in the first half this year, in addition to tax breaks and more fiscal spending.
Some economists project that China's gross domestic product may expand 8.5 percent from a year earlier in the first three months, slowing further from 9.2 percent in 2011's final quarter.
The official Purchasing Managers' Index, which is weighted toward state-owned enterprises, was 53.1 in March, a one-year high and up 2.1 points from a month earlier, the China Federation of Logistics and Purchasing said.
In contrast, the HSBC China Manufacturing Purchasing Managers' Index, which is slanted toward private and export-oriented companies, was 48.3 last month, down from February's 49.6 and falling at the second fastest pace in three years.
A reading of 50 separates expansion from contraction in both surveys.
"The official PMI data are much better than expected," said Liu Ligang, an economist with Australia and New Zealand Banking Group Ltd. "It shows China's manufacturing sector has had a quick rebound from the slowdown during the Spring Festival holiday, but seasonal factors alone can't explain such a strong jump."
Liu said the increase may dilute fears of a sharp moderation in China's economic growth in the first quarter - the figures are due to be released on April 13 - and may delay the introduction of more policy easing measures.
The federation said that more new orders contributed the most to the increase in the official PMI. Component indices showed new orders rose 4.1 points from a month earlier to 55.1, reflecting strong demand in industrial sectors such as machinery, automobiles and medical equipment.
Production in March picked up 1.4 points to 55.2.
However, it was the fifth successive month that the HSBC PMI had recorded a deterioration in private and export-oriented companies.
Qu Hongbin, chief economist for China at HSBC, said its survey confirmed a further slowdown of growth momentum, made worse by weakening export orders.
"As inflation pressures continue to ease, weaker export growth is likely to prompt easing measures," Qu said. "Once the easing measures filter through, growth is likely to start bottoming out in the second quarter and rebound modestly in the second half."
Qu said the reserve requirement ratio, the money banks must set aside as reserves, would be cut at least once in the first half this year, in addition to tax breaks and more fiscal spending.
Some economists project that China's gross domestic product may expand 8.5 percent from a year earlier in the first three months, slowing further from 9.2 percent in 2011's final quarter.
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