Return to growth on the cards as demand rises
Print Edition
CHINA’S manufacturing may have returned to growth for the first time in six months, with demand recovering at home and abroad, a survey showed yesterday.
The HSBC Flash China Manufacturing Purchasing Managers’ Index, the earliest available indicator of China’s industrial sector, rose to a seven-month high of 50.8 for June.
A reading above 50 indicates expansion, and it was the first time the index, complied by HSBC Holdings plc and research firm Markit, had been above that line since January.
It settled at 49.4 in May.
Qu Hongbin, chief economist for China at HSBC, said the improvement was broad-based.
“Both domestic orders and external demand component indexes are in expansionary territory, while inventory reduction quickens, and employment also shows signs of stabilization,” Qu said. “They are consistent with the data suggesting that the authorities’ mini-stimulus are filtering through to the real economy.”
The components showed that production picked up by 2 points from a month earlier to 51.8 in June, and new orders increased 1.8 points to 51.8 as well. In addition, the stock of finished goods fell by 1.8 points to 48, registering the lowest level since September 2011.
Qu said infrastructure investments and related sectors will continue to support recovery over the next few months, and he expected policy-makers to continue with an accommodative policy stance until recovery is sustained.
Zhu Haibin, chief economist for China at JPMorgan, said the improvement in the flash HSBC PMI suggested the first-quarter slowdown in industrial activity had likely bottomed out.
“The manufacturing sector appears to be on track to some decent recovery,” Zhu said. “Along with the set of May macroeconomic data, they indicate moderate growth improvement, reflecting early impact from the authorities’ recent pro-growth measures at a time when global economic outlook has turned more constructive.”
China has announced a number of policies to support growth and create jobs. The State Council allowed banks to leave a smaller amount of money as reserves and accelerated the construction of railways. Last month, it also released detailed measures to stabilize trade last month.
In the first quarter, China’s gross domestic product expanded 7.4 percent year on year, the slowest in six quarters. JPMorgan forecast the rate will stay the same in the second quarter, and slow to 7.1 percent in the third and fourth.
There will be two separate sets of undercurrents affecting China’s growth in the second half, Zhu said.
“On the positive side, the moderately above-trend growth in the global economy, led by the developed countries, should support China’s export sector,” Zhu said.
“On the domestic front, infrastructure investment will likely receive further policy support.”
However, the real estate sector remains a key downside risk for the macroeconomic picture for the rest of the year, Zhu said.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 娌狪CP璇侊細娌狪CP澶05050403鍙-1
- |
- 浜掕仈缃戞柊闂讳俊鎭湇鍔¤鍙瘉锛31120180004
- |
- 缃戠粶瑙嗗惉璁稿彲璇侊細0909346
- |
- 骞挎挱鐢佃鑺傜洰鍒朵綔璁稿彲璇侊細娌瓧绗354鍙
- |
- 澧炲肩數淇′笟鍔＄粡钀ヨ鍙瘉锛氭勃B2-20120012
Copyright 漏 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
