Chinese factory activity expands more slowly, HSBC final PMI shows
China’s factory activity expanded at the slowest pace in three months last month, weighed down by shrinking export orders, a private survey showed on Thursday, consistent with views the economy’s growth rate has moderated into the end of the year.
The final HSBC/Markit manufacturing Purchasing Managers Index (PMI) slipped to 50.5 from 50.8 in November, unchanged from a preliminary reading.
“The recovering momentum since August last year is continuing into this year, in our view,” said Qu Hongbin, chief China economist at HSBC.
“With inflation still benign, we expect the current monetary and fiscal policy to remain in place to support growth,” he added.
A sub-index measuring new export orders touched a four-month low of 49.1 in December, the first time since August it had dropped below the 50-point watershed that separates expansion from contraction, suggesting unsteady external demand.
China’s total exports and imports are expected to have reached US$4.14 trillion last year, Commerce Minister Gao Hucheng has said.
That would indicate annual trade growth of 7 per cent, a touch lower than the official target of 8 per cent.
The PMI survey also showed the output sub-index eased from November’s eight-month high, showing moderate growth.
China’s official manufacturing PMI, released on Wednesday, showed growth in factories slowed slightly last month as export orders and output weakened, though the figure remained above the line separating expansion from contraction.
Beijing has made it clear that it would accept slower growth as it pushes ahead with structural reforms to steer the world’s second-largest economy towards more sustainable growth after three decades of breakneck expansion.
Top leaders have pledged to maintain prudent monetary policy and proactive fiscal policy this year to achieve reasonable economic growth.