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Drop in HSBC flash PMI confirms weakness in Chinese economy

Mainland manufacturing contracts in survey, highlighting hurdles to hitting growth targets

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Earlier this month, economists cut their projections for China's growth after industrial production trailed estimates. Photo: AFP

An index of mainland manufacturing activity unexpectedly fell, underscoring the risk that leaders will need to add stimulus to meet this year's goal for economic growth.

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The flash purchasing manager's index from HSBC and Markit Economics dropped to 48.1 this month, the companies said yesterday.

The preliminary reading compares with the 48.7 median estimate of 22 analysts surveyed and last month's final 48.5 figure. Numbers above 50 signal expansion.

The Australian dollar fell and copper extended losses as the report suggested Premier Li Keqiang will have a tougher time meeting a growth target of about 7.5 per cent this year amid efforts to curb pollution and financial risks from surging debt.

We expect Beijing to launch a series of policy measures to stabilise growth
QU HONGBIN, ECONOMIST, HSBC

The State Council said last week that China would speed up construction projects and other measures to support the world's second-largest economy.

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