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Manufacturing in China losing steam as economy slows
China has a serious case of the jitters over Europe’s debt crisis and a stagnant US market. Industrial output is expected to slow.
Beijing (AsiaNews/Agencies) – China's manufacturing activity in November slumped to its lowest level since March 2009. The preliminary HSBC purchasing managers' index (PMI) dropped to 48 in November down from 51 in October. A reading above 50 indicates the sector is expanding whilst a reading below 50 suggests a contraction. The final figure will be released on 1 December.
HSBC’s preliminary index, called the Flash PMI, is based on 85 on responses to a survey sent to executives in charge of purchasing in 420 companies.
Results show that Chinese exports are being badly affected by the debt crisis in Europe, China’s main export market, and by the US economy tittering on the edge.
Other analysts also note that the slowdown is the result of government policy to hold inflation in check and prevent the real estate bubble from bursting.
The PMI index confirms what Deputy Premier Wang Qishan, China's top finance official, said, namely the global recession is here to stay and would impact China’s export-dependent economy.
HSBC economist Hongbin Qu said the data implied that industrial production will moderate to annualised growth rates of 11 per cent to 12 per cent in the coming months. It was 13.2 in October and 13.8 per cent in September.
Both domestic and external demand are cooling, Qu said.
Chinese exports to the European Union dropped to US$ 28.74 billion against US$ 31.61 in September. Those to the United States fell to US$ 28.6 billion against US$ 30.22 billion a month earlier.
China’s slowing trade with the world comes at a time when its overall growth rate is also declining, from 10.4 per cent last year to 9.7 per cent in the first quarter of 2011, 9.5 in the second and 9.1 in the third.