China manufacturing activity hits eight-month low in March: HSBC
By Kelly Olsen ,AFP
March 25, 2014, 12:17 am TWN
BEIJING -- Chinese manufacturing activity contracted in March to its lowest level in eight months, data showed Monday, prompting calls for policymakers to tackle a painful slowdown of growth in the world's number two economy.
The data are the latest in a string of weak indicators from Beijing, and economists said measures to inject life back into the Asian powerhouse were probably on the horizon.
HSBC's preliminary purchasing managers' index (PMI), which tracks manufacturing activity in China's factories and workshops, fell to 48.1 from a final reading of 48.5 in February, the British bank said in a statement.
The figure is down from 49.5 in January and was the worst result since July's 47.7, according to the bank. The final figure is due out on April 1.
The index is a closely watched gauge of the health of the Asian economic powerhouse, a key driver of global growth. A reading above 50 indicates growth, while anything below signals contraction.
China's National Bureau of Statistics said earlier this month that its own official PMI reading fell to an eight-month low of 50.2 in February.
The latest figure "suggests that China's growth momentum continued to slow down" in March, Qu Hongbin, HSBC's Hong Kong-based chief China economist, said in the statement.
"Weakness is broadly based with domestic demand softening further," he added.
HSBC expects Chinese authorities to take policy steps to stabilize the economy, with actions including easing barriers to private investment, spending on urban railways, public housing and fighting air pollution, as well as "guiding lending rates lower," Qu said.
Other economists also expressed concern, pointing out that the March figure usually benefits from a cyclical boost.
"The weakness appears even more pronounced given that there is usually a seasonal rebound after the Chinese New Year holiday," Capital Economics Asia economist Julian Evans-Pritchard said in research note.
China's annual week-long lunar new year holiday fell largely in February this year.
Nonetheless, Chinese shares closed higher on Monday with the benchmark Shanghai Composite Index rising 0.91 percent, or 18.66 points, to 2,066.28.