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China August manufacturing weakens: HSBC
August 21, 2014, 5:37 am

 

The top Chinese leadership have said they are willing to accept a slower pace of growth, vowing to transform the economy from an investment and exports-led system to a more sustainable consumption-led one [Getty Images]

The top Chinese leadership have said they are willing to accept a slower pace of growth, vowing to transform the economy from an investment and exports-led system to a more sustainable consumption-led one [Getty Images]

China’s manufacturing in August expanded at the slower pace in three months, according to a HSBC survey.

The HSBC/Markit China flash manufacturing PMI for August released on Thursday dipped to 50.3 from a final reading of 51.7 in July.

Both output and new orders slowed, according to HSBC’s preliminary purchasing manager’s index (PMI).

The latest data pointed to still weaker recovery rates.

A PMI above 50 per cent indicates expansion and below 50 per cent suggests contraction.

“The data suggests that the economic recovery is still continuing but its momentum has slowed again,” noted HSBC chief China economist Qu Hongbin.

After a shaky start this year, Chinese policymakers have pinned hopes on accelerating investment on railways and infrastructure, quickening fiscal spending, and selectively easing monetary policies to support faltering growth.

Growth in the second quarter of 2014 accelerated to 7.5 per cent from the 7.4-per cent expansion in the first.

HSBC said in its note it was important for Chinese policymakers to continue reforms to help consolidate the recovery trend.

“Both monetary and fiscal policy should remain accommodative until there is a more sustained rebound in economic activity,” the HSBC China Chief said.

The data sent Chinese stocks headed downward in the morning session, with both the Shanghai and Shenzhen Component Index experiencing losses.

 

Source: Agencies

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