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China manufacturing contracts again: HSBC

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China’s manufacturing industry contracted again in April, though it was up on the previous month, according to a new survey.

AAP reports that the HSBC purchasing managers index (PMI) for China was 48.1 in April. All figures greater than 50 represent expansion in the market, while figures under 50 mean activity contracted.

This represented an improvement from the March figure of 48.0 but was lower than the forecast figure of 48.3.

Commenting on the result, Qu Hongbin, a Hong Kong-based economist with HSBC, said in a statement, "These indicate that the manufacturing sector, and the broader economy as a whole, continues to lose momentum."

Last month the Chinese government introduced tax breaks for small enterprises and targeted infrastructure outlays in an attempt to improve growth.

However, the government is attempting to move the economy from a reliance on exports and investment to increased consumption.

Therefore they will not use a massive stimulus package to improve growth as they have done previously.

As Reuters reports, according to the official Chinese government PMI, activity in China’s manufacturing sector actually picked up in April, though only slightly. The figure rose to 50.4 in April from March's 50.3.

In comparison, the HSBC figure surveys a smaller sample and focuses more on smaller companies.

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