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Flash PMI points to weakness in Chinese economy

By Wang Yanlin | November 20, 2014, Thursday | Online Edition

China's manufacturing sector may grow at the slowest pace in six months in November, indicating weakness 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 50 in November, down from October's final reading of 50.4, according to HSBC and research firm Markit.

A reading of 50 means neither expansion nor contraction.

Qu Hongbin, chief economist for China at HSBC, said new export order growth continued to ease and led to a production component index reading below 50 for the first time since May, while disinflationary pressures remained strong and the labor market showed further signs of weakening.

"Weak price pressures and low capacity utilization point to insufficient demand in the economy," Qu said. "Furthermore, we still see uncertainties in the months ahead from the property market and on the export front."

Qu said growth still faces significant downward pressures, and more monetary and fiscal spending easing measures should be deployed.

The economy grew at the slowest pace in more than five years in the third quarter, and major activity indicators pointed at continued weakening in October after stabilizing in September, according to National Bureau of Statistics data.

Third-quarter growth of 7.3 percent, the weakest since the first quarter of 2009, was led by the property sector and due to a high comparative base last year.

In the first three quarters, China's gross domestic product expanded 7.4 percent, largely in line with the government target of 7.5 percent.

Economy


 

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