BEIJING: China's manufacturing activity shrank for an 11th straight month in
September, HSBC said on Saturday, adding to pressure on Beijing to provide
fresh stimulus to boost the world's second largest economy.
The final reading of the
purchasing mangers' index (PMI) released by the British banking giant hit 47.9
this month, a mild improvement from a final reading of 47.6 in August, HSBC
said in a statement.
The index is closely watched as
it gauges nationwide manufacturing activity, a key sector of the Chinese
economy. A reading below 50 indicates a contraction in manufacturing, while a
reading above 50 indicates expansion.
China's official PMI figure for
August released earlier this month hit a nine-month low of 49.2.
The final HSBC reading was
slightly above the preliminary PMI of 47.8, announced on September 20, and may
ease concerns over China's sharp slowdown.
The latest figure marked nearly a
year of continuous contraction since November last year, underscoring broader
economic weakness and shrinking demand in key overseas markets.
New export orders fell at the
fastest rate in 42 months, HSBC said, indicating that economic weakness in
major export markets such as the United States and Europe were continuing to
weigh on the Chinese economy.
Qu Hongbin, HSBC's Hong
Kong-based chief economist for China, said that manufacturing was probably
hitting its low-point but that Beijing still needed to introduce further
stimulus to help the economy.
"Chinese manufacturing
growth is likely to be bottoming out," he said in a statement.
"However, the sharper
contraction of new export orders and the lingering pressures on job markets
mean that Beijing should step up easing to support growth and employment,"
he added.
"Fiscal measures should play
a more important role in the coming months".
Authorities this year have tried
to boost the economy with interest rate cuts and by lowering the amount of cash
banks must keep on hand in a bid to spur the kind of lending that could
stimulate stronger growth.
There are expectations that the
government will take the upcoming week-long public holiday as an opportunity to
introduce a new round of stimulus.
China's economic growth slowed to
7.6 percent in the three months through June, the sixth straight quarter of
weakening expansion and the worst result since the height of the global
financial crisis.
Weak economic data in the current
third quarter have raised fears China's growth may have slowed for a seventh
straight quarter when gross domestic product figures are released next month.
Problems in the broader global
economy, including Europe's prolonged debt crisis and a sluggish recovery in
the United States -- both major trading partners for China -- have been a drag
on growth.
Premier Wen Jiabao said this
month that China is still likely to achieve its annual economic growth target
of 7.5 percent. Even so, that would mark a significant slowdown from 9.3
percent growth in 2011 and 10.4 percent in 2010.
The commerce ministry said this
month that China faced "enormous difficulties" in meeting its target
to maintain 10 percent growth in trade this year, citing weak overseas demand
as the world economy remains under pressure.
- AFP/al
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