Monday, July 2, 2012
China faces sluggish growth in manufacturing sector
China's weak manufacturing growth in 2012 underscores its economic slowdown, with a marked decrease in both export demand and new orders.
The Purchasing Manager's Index (PMI) dropped to 50.2 in June from 50.4 in May, according to the National Bureau of Statistics and China Federation of Logistics and Purchasing. A figure above 50 indicates growth.
Based on the low PMI data, Chinese Premier Wen Jiabao may enact stimulus measures to jumpstart China's economy, the second biggest in the world. The central bank will adjust fiscal policies in a "timely and appropriate" way, according to central bank Governor Zhou Xiaochuan.
"Although the PMI is slightly better than consensus, the underlying trend still indicates a deterioration in economic activity," said Shen Jianguang, chief Asia economist for Mizuho Securities Asia to Tapei Times. "Further monetary easing is warranted, with two interest-rate cuts and reserve ratio cuts in the second half increasingly likely. "
"Tumbling export orders point to headwinds to exports in the third quarter, suggesting domestic demand needs to pick up to stabilize growth," Chang Jian, a Hong Kong economist at Barclays Capital, told the Tapei Times.
For more of the Tapei Times story: www.taipeitimes.com
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