China's manufacturing activity growth slowed for the first time in six month in August, two separate business surveys showed Monday, casting shadows on recovery in the world's second-largest economy despite a series of stimulus measures by the government.
The official manufacturing Purchasing Managers Index (PMI) slipped to 51.1 on a 100-point scale last month, down from a 27-month high of 51.7 in July, the National Bureau of Statistics and the China Federation of Logistics and Purchasing said.
But the August index still stayed above the key 50 percent line. A PMI reading above 50 percent indicates growth from the previous month, while a reading below 50 represents contraction in China's manufacturing sector. The index is a closely watched barometer of the health of the Chinese economy.
British bank HSBC Ltd., separately said its own final PMI for August was revised down to a three-month low of 50.2 from its preliminary reading of 50.3 released on Aug. 21. The index fell from July's final reading of 51.7, which marked the highest level in 18 months.
"Although external demand showed improvement domestic demand looked more subdued. Overall, the manufacturing sector still expanded in August, but at a slower pace compared to previous months," HSBC economist Qu Hongbin said in a statement accompanying the data. "We think the economy still faces considerable downside risks to growth in the second half of the year which warrant further policy easing to ensure a steady growth recovery," Qu added.
China's economy grew 7.5 percent year-on-year in the second quarter of this year, slightly higher than the 7.4 percent expansion in the first quarter. After a shaky start this year, Chinese policymakers have pinned hopes on quickening fiscal spending and selectively easing monetary policies to support faltering growth, state-run Xinhua News Agency said Monday.
The government has called for more efforts to optimize credit structure by guiding more credit flow into the agriculture sector and small businesses against the backdrop of prudent monetary policy, it said.