HSBC: China manufacturing gauge picks up in September

GMT 03:46 2014 Tuesday ,23 September

Arab Today, arab today HSBC: China manufacturing gauge picks up in September

China's manufacturing sector
Beijing - AFP

China's manufacturing sector saw a surprise pick-up in September, a closely watched survey showed Tuesday, providing some respite after a string of weak data pointing to a slowdown in world's second-largest economy.
HSBC said its preliminary purchasing managers index (PMI), which tracks activity in China's factories and workshops, advanced to a two-month high of 50.5, higher than a final reading of 50.2 in August.
A reading above 50 indicates the sector is expanding.
Concerns over China's economy -- a key driver of global growth -- have intensified following a string of lacklustre recent data, with economists calling for authorities to take further action to kickstart growth.
Qu Hongbin, HSBC's chief economist for China, said that while the result indicated manufacturing sector activity was stabilising this month, expansion was still modest.
"The property downturn remains the biggest downside risk to growth," he said in the statement.
"We continue to expect more monetary easing from the PBoC (People's bank of China) in order to steady the recovery," he added.
Since April, Chinese authorities have introduced a string of measures to boost growth, including small business tax breaks, targeted infrastructure spending and incentives to spur lending in rural areas and to small companies.
And last week reports said the PBoC would pump $81 billion into the country's top five banks to spur lending to companies.
However, economists have warned that their effect is waning and they worry that a slowdown in the crucial property sector, where new home prices have fallen for four straight months, could derail chances of a rebound.
Earlier this month, the government said industrial production growth slowed sharply in August to its lowest level for more than five years, while expansion in retail sales and fixed asset investment also weakened.
China's economy grew a higher-than-expected 7.5 percent in the second quarter, up from 7.4 percent in the previous three months, which was the worst since a similar 7.4 percent expansion in July-September 2012.
Beijing is targeting expansion of about 7.5 percent this year, the same as last year's objective, as it tries to pull off a delicate transformation of the country's growth model whereby consumer spending becomes the main driver rather than investment.
The PMI index is compiled by information services provider Markit and released by HSBC.
HSBC said the final PMI result for September would be announced next Tuesday.
China releases its own official PMI at the beginning of each month.
That indicator came in at 51.1 in August, down from 51.7 in July.


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