China's Manufacturing Activity Slows

Amid concerns that global demand for Chinese exports will decrease, the China’s Purchasing Manager’s Index has dropped for the first time in three months. This drop is the lowest recorded growth in three years. BBC reports:

China’s Purchasing Managers Index (PMI) fell to 50.4 in October from 51.2 in the previous month, the first drop in three months.

[…] “Future export and investment growth is expected to continue to decline,” said Zhang Liqun of the China Federation of Logistics and Purchasing.

Despite earlier reports that the government would regulate inflation and foster growth, analysts predict further drops in manufacturing growth, imports, and export orders. The Associated Press adds:

The figure “is consistent with our view that growth is losing steam,” UBS economist Wang Tao said in a report. The weakness in export demand was unsurprising, she said, given the ongoing European debt crisis.

A similar survey by HSBC showed a contrary trend, with its PMI rising to 51.0 in October from 49.9 the month before. Though it reported an improvement, HSBC said the figure indicated just a “modest rate of growth.”

The World Bank forecasts that China’s economy will grow a relatively robust 9.3 percent this year. But most economists are forecasting a drop to below 9 percent growth next year, slowed by tight credit aimed at fighting inflation and weak export demand

See also: Wenzhou’s Wikileaks Chronicles Warning Signs for China’s Economy and China Looks to Curb Debt and Regulate Inflation via CDT.


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