Newsmax TV & Webwww.newsmax.comFREE - In Google Play
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
Tags: China | Slower | Manufacturing | Recovery

China’s Slower Manufacturing Casts Shadow Over Recovery

Monday, 25 February 2013 09:37 AM EST

China’s manufacturing is expanding at the slowest pace in four months, a private survey showed, underscoring the headwinds faced by policy makers in the world’s second-biggest economy.

The preliminary reading of a Purchasing Managers’ Index was 50.4 in February, according to a statement from HSBC Holdings Plc and Markit Economics Monday. That compares with the 52.3 final reading for January and the 52.2 median estimate of 11 analysts surveyed by Bloomberg News. A number above 50 indicates expansion.

Monday’s report may damp optimism that an economic rebound is gaining traction following a seven-quarter slowdown and the weakest annual expansion in 13 years. The benchmark Shanghai Composite Index last week dropped the most since May 2011 on concern the government will expand restrictions on the property market to curb home-price gains.

“It casts some shadow over China’s recovery,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong and a former researcher for the International Monetary Fund. “Chinese economic fundamentals may prove weaker than previously expected.”

China’s economy expanded 7.9 percent in the final three months of 2012 from a year earlier, the first pickup in eight quarters. Growth may accelerate to 8.2 percent this quarter, according to the median estimate of 23 analysts surveyed by Bloomberg News this month.

Export Gain

Exports rose more than estimated last month and a broad measure of credit increased to a record, boosting prospects that the economic rebound is gaining momentum. Data in the first two months are distorted by the weeklong Chinese Lunar New Year holiday, which was in January last year and February this year.

The yen fell and Asian stocks rose today, with the regional benchmark index extending last week’s advance. Japanese shares gained on speculation Prime Minister Shinzo Abe will name a central bank governor who will deploy aggressive monetary easing.

The MSCI Asia Pacific Index rose 0.3 percent to 133.98 at 12:14 p.m. in Tokyo. The measure added 0.5 percent last week.

Elsewhere in Asia, inflation in Singapore probably slowed to 4 percent last month from a year earlier, compared with 4.3 percent in December, economists predicted before a report today.

In Europe, Poland’s retail sales probably plunged 22.4 percent in January from the prior month, when they rose 15.1 percent, according to a survey of economists.

In the U.S., Federal Reserve Bank of Atlanta President Dennis Lockhart is scheduled to speak in Knoxville, Tennessee, on the economic outlook.

China Reading

The HSBC gauge’s preliminary reading, called the Flash PMI, is based on 85 percent to 90 percent of responses to a survey of more than 420 companies. The data for this month’s reading was collected from Feb. 12-21.

“Despite the moderation of February’s flash PMI, the index recorded the fourth consecutive reading above the 50 critical line,” Qu Hongbin, chief China economist for HSBC in Hong Kong, said in a statement. The recovery’s “underlying strength” is still “intact, as indicated by the still-expanding employment and the recent pickup of credit growth,” Qu said.

HSBC and Markit will report the final February reading on March 1, the same day that a separate, government-backed purchasing managers’ index will be released. The official gauge showed a fourth month of expansion in January with a reading of 50.4, down from 50.6 in December.

Hitachi Construction Machinery Co., the world’s biggest maker of giant excavators used in mining, had a loss in the three months through December as Chinese sales slumped and falling coal prices slowed sales to miners in Southeast Asia, a Jan. 30 report showed. The company expects demand to recover “at a moderate pace,” President Yuichi Tsujimoto said in an interview on Feb. 18.

© Copyright 2022 Bloomberg News. All rights reserved.

China’s manufacturing is expanding at the slowest pace in four months, a private survey showed, underscoring the headwinds faced by policy makers in the world’s second-biggest economy.
Monday, 25 February 2013 09:37 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
Get Newsmax Text Alerts

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved
© Newsmax Media, Inc.
All Rights Reserved