China manufacturing gauge dips to 7-month low

By Wang Yanlin | December 16, 2014, Tuesday |

Online Edition

CHINA'S manufacturing sector may grow at the slowest pace in seven months in December, indicating further deterioration of domestic demand in the world's second-largest economy, a survey showed today.

The HSBC Flash China Manufacturing Purchasing Managers' Index, the earliest available indicator of China's industrial sector, landed at 49.5 in December, down from November's final reading of 50, according to HSBC and research firm Markit.

A reading below 50 means contraction. It was also the index's first fall into the deceleration trajectory since May.

Qu Hongbin, chief economist for China at HSBC, said the components showed both domestic demand and prices slowed considerably.

"The manufacturing slowdown continues in December and points to a weak ending for 2014," Qu said. "The rising disinflationary pressures, which fundamentally reflect weak demand, warrant further monetary easing in the coming months."

China's gross domestic product grew 7.3 percent from a year earlier in the third quarter, the slowest pace in more than five years led by corrections in the property sector.

To support growth, the People's Bank of China last month lowered the benchmark interest rates for the first time in more than two years, following easier policies that loosened restrictions imposed on real estate transactions.

Economy

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China manufacturing gauge dips to 7-month low

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