Beijing (AsiaNews/Agencies) - The Euro zone crisis has hit China's manufacturing with export orders shrinking in February the most in eight months. Exports usually decline in January as plants close for a few weeks for Chinese New Year, but this time a preliminary HSBC business survey shows the crisis has come home to China.

The new export orders sub-index dropped to 47.4-the lowest in eight months-from 50.4 in January as the European debt crisis cast a shadow over Chinese exports. Overall, new orders were flat at 49.1, a level that indicates they were falling.

HSBC flash PMI, the earliest indicator of China's industrial activity, rose to a four-month-high at 49.7 in February from 48.8 in January. Final data will be released on 1 March.

"Growth remains on track for a slowdown, despite the marginal improvement in the headline flash PMI led by quickened production after the Chinese New Year," said Hong bin Quad, HSBC's chief economist for China.

"With a meaningful rebound of domestic demand not in sight, external weakness is starting to bite, adding more downside risks to growth. The People's Bank of China, after delivering this year's first RRR cut, should step up policy easing as inflation pressures continue to ease."

China's export growth could slip to 13-15 per cent in 2012 from 20.3 per cent in 2011, said Liu Li-Gang, chief China economist at ANZ in Hong Kong.

New markets are needed. Two more reserve requirement ratio cuts are expected this year.