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Chinese manufacturing growth slows again

Editorial
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China’s manufacturing sector grew slightly in August, but it did so at a slower rate than the previous month, according to key indexes.

The Business Spectator reports that China's official manufacturing purchasing managers' index (PMI) for August was 51.1, compared with July’s figure of 51.7.

Figures above 50 indicate increased activity, while figures under 50 indicate contraction.

In addition, the HSBC PMI for August was 50.2, compared to the July figure of 51.7.

According to Reuters, the results have raised concerns that the Chinese economy is faltering after a bounce. And there is a possibility that Beijing could use fiscal and monetary policies to encourage growth.

Most sub-indices also decreased. According to the official figures, the labour market, new orders delivery time and raw material inventory all fell.

"Overall, the manufacturing sector still expanded in August, but at a slower pace compared to previous months," said Hongbin Qu, HSBC's chief economist for China.

"We think the economy still faces considerable downside risks to growth in the second half of the year, which warrant further policy easing to ensure a steady growth recovery.”

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