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China's manufacturing activity continued to expand at a slower pace in June
due to the government's tightening measures amid an industrial restructuring and
an uncertain global economic recovery, two key indices showed yesterday.
However, analysts ruled out a possibility of a double-dip and believed the
slowdown was steady, which will be positive to support a sustainable economic
growth.
The official Purchasing Managers' Index, a comprehensive gauge of industrial
activity, eased 1.8 percentage points from a month earlier to 52.1 percent in
June, the China Federation of Logistics and Purchasing said.
A reading above 50 points indicates expansion, and it has stood above 50
points for 16 straight months.
The HSBC's index slowed to a 14-month low at 50.4 in June, a dip for the
third month.
The official PMI is weighted heavily toward big domestic companies while
HSBC's is geared toward privately-owned and export-oriented firms.
The PMI reading provided further evidence that Chinese economy is slowing
from a cyclical peak of 11.9 percent in the first quarter as the tightening
measures seemed to have taken effect, said Qu Hongbin, chief economist for China
at HSBC.
"But fears over a hard landing (for the economy) are overplayed. We expect
China to grow around 9 percent in the second half, underpinned by massive
ongoing investment and robust private consumption," Qu said.
Ten out of 11 subcomponent indices of the official PMI deteriorated compared
with the previous month's reading.
Input prices slid the most as they fell 7.6 percentage points to 51.3 in June
due to the decline in global commodity prices amidst concerns about the European
debt crisis.
"Declines in input prices may signal that enterprises will face less cost
pressures," said Zhang Liqun, a federation analyst.
Indices under the official PMI showed that June's industrial output slowed to
55.8 from 58.2 in May, while new orders eased to 52.1 from 54.8, and new export
orders dropped to 51.7 from 53.8. The removal of tax refunds on some
high-polluting products and changes in the exchange rate will add to the gloomy
outlook for exports. |
