China’s factory output growth has slumped in April: HSBC
23 Apr 2013
Manufacturing growth in in China slowed in April on weakness in global and domestic demand, an HSBC survey says, adding to concerns about the country's economic recovery.
The preliminary reading of HSBC's Purchasing Managers Index (PMI) released today by HSBC Holdings Plc and Markit Economics fell to 50.5, from 51.6 in March. A reading above 50 indicates expansion.
Last year, China's economy grew at its slowest pace in 13 years.
"New export orders contracted after a temporary rebound in March, suggesting external demand for China's exporters remains weak," said Qu Hongbin, China chief economist at HSBC in a statement.
Both Chinese and Asian shares fell after the release of the data, with the main index in Shanghai falling 1.4 per cent this morning.
China's stocks slumped as the data added to an unexpected slowdown in economic growth, reported last week, that prompted banks including Goldman Sachs Group Inc to cut full-year forecasts.
Growth in gross domestic product for the first three months of the year declined to an annual rate of 7.7 per cent, compared with 7.9 per cent in the previous three months.
Chinese central bank Governor Zhou Xiaochuan said in Washington on 20 April that a 7.7 per cent first-quarter expansion was reasonable and ''normal,'' highlighting reduced expectations after 10 per cent-plus rates during the past decade.
The World Bank, as well as private sector banks, said they expected growth to slow to 8 per cent this year - low for China, though still high by global standards.
The government has said it will take steps to try to support the economy.
"Beijing is expected to respond strongly to sustain the economic recovery by increasing efforts to boost domestic investment and consumption in the coming month,'' HSBC's Qu said.
