Chinese manufacturing industry slows
Updated: Tuesday, 23 Apr 2013 07:07
Growth in China's vast factory sector dipped in April as new export orders shrank.
The preliminary survey of factory managers suggests that the world's second-largest economy still faces formidable global headwinds into the second quarter.
The flash HSBC Purchasing Managers' Index for April fell to 50.5 in April from 51.6 in March, but it was still stronger than February's reading of 50.4.
A sub-index measuring new export orders fell to 48.6 in April from 50.5 in March, reflecting weaker global demand as the US economic recovery remains fragile and the euro zone is mired in recession.
The figures follow an unexpected contraction in export orders in March to Taiwan, one of the region's biggest providers of tech gadgets, signalling that Asia's trade-reliant economies may be losing further momentum.
Exports from South Korea, another big supplier to the global tech industry, fell by 3.1% for the first 20 days of April from a year earlier.
The latest PMI data may overshadow China's recovery in the second quarter after growth unexpectedly slowed to 7.7% in the first quarter from 7.9% in the previous three months.
The slowdown, which came despite a credit boom, suggesting the cash circulating around the economy is not having the desired effect of stoking growth and could instead exacerbate property and inflationary risks.
China's industry ministry noted in a separate statement today that companies had no strong desire to invest given weak demand and overcapacity, and it did not see any improvement in their difficulties operating in an uncertain and unstable global environment.
Analysts expect full-year economic growth to pick up slightly to 8% in 2013 from 7.8% last year, its weakest rate since 1999.
China has set a 7.5% GDP growth target for 2013, a level Beijing deems sufficient for job creation while providing room to deliver structural adjustment.
The government is expected to step up infrastructure investment to cushion the economy against global headwinds, but a big stimulus package looks unlikely as Beijing plans to deepen reforms to put growth on a more sustainable long-term footing.