China’s manufacturing expanded at a
weaker pace in April in a sign that the nation’s slowdown in
economic growth is extending into the second quarter.
The Purchasing Managers’ Index was at 50.6, the National
Bureau of Statistics and China Federation of Logistics and
Purchasing said today in Beijing. That compared with the 50.7
median forecast of 31 analysts in a Bloomberg News survey and a
March reading of 50.9. Readings above 50 signal expansion.
Chinese stocks fell to a four-month low before the
nationwide holiday that ends today on concern that a slowdown
will drag on earnings. Growth risks include weakness in export
demand, property-market overheating, a surge in so-called shadow
banking and the damping of consumption by President Xi Jinping’s
campaign to rein in official spending.
“The debate about growth — and just how much we should
worry about this weak recovery — is likely to build in
Beijing,” said Stephen Green, head of Greater China research at
Standard Chartered Plc in Hong Kong. Today’s number is
“disappointing,” he said in an e-mail.
A gauge of new orders fell to 51.7 from 52.3 in March,
while an index of new export orders dropped to 48.6 from 50.9
and the reading on inventories of finished goods declined to
47.7 from 50.2, according to today’s data, based on a survey of
businesses.
Stocks Down
The benchmark Shanghai Composite Index (SHCOMP) is down 11 percent
from this year’s Feb. 6 high, with financial markets due to open
tomorrow. The MSCI Asia Pacific Index of stocks fell 0.2 percent
at 10:15 a.m. in Tokyo.
The decline in April’s index shows that the “foundation of
an economic stabilization is still not solid,” Zhang Liqun, a
researcher with the Development Research Center, an agency
advising China’s cabinet, said in a statement. “The economic
growth rate may fall slightly in the future, and China needs to
stabilize domestic demand to make the economic recovery more
sustainable.”
The world’s second-biggest economy expanded 7.7 percent in
the first quarter, less than analysts’ forecasts and below the
7.9 percent pace in the final three months of last year. Growth
in industrial companies’ profits slowed in March, an April 27
report showed.
A private survey of China manufacturing by HSBC Holdings
Plc and Markit Economics had a preliminary reading of 50.5 for
April, down from the final level of 51.6 for March. The final
figure for last month will be released tomorrow.
Sample Size
The federation in January increased the number of companies
in its survey to 3,000 from 820 and reclassified the industries
covered into 21 groups from 31. HSBC’s index is based on
responses from purchasing managers at more than 420 businesses
and is weighted more toward small companies.
“China needs to cement its domestic economic growth
momentum and guard against potential risks in financial
sectors,” the Politburo Standing Committee said in an April 25
statement.
Japanese and South Korean industrial output was less than
estimates in March and Taiwan’s first-quarter growth was half
the forecast pace as weakness in global demand limits recoveries
in Asian economies, reports showed yesterday.
To contact Bloomberg News staff for this story:
Xin Zhou in Beijing at
xzhou68@bloomberg.net
To contact the editor responsible for this story:
Paul Panckhurst at
ppanckhurst@bloomberg.net
China Manufacturing Expands at Weaker Pace After Economy Slows
Nelson Ching/Bloomberg
An employee at the BMW Brilliance Automotive Ltd. Tiexi plant moves auto parts in Tiexi, near Shenyang, Liaoning Province, China.
An employee at the BMW Brilliance Automotive Ltd. Tiexi plant moves auto parts in Tiexi, near Shenyang, Liaoning Province, China. Photographer: Nelson Ching/Bloomberg
April 30 (Bloomberg) — Herve Lievore, a senior macro and investment strategist at HSBC Global Asset Management, talks about the impact of Bank of Japan monetary policy on the region’s emerging markets, and the economic outlook for China.
He speaks in Hong Kong with Zeb Eckert on Bloomberg Television’s “On the Move.” (Source: Bloomberg)
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China Manufacturing Gauge Falls in Sign of Further Slowdown – Bloomberg
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