China's
manufacturing activity slows
BEIJING — China's manufacturing activity slowed in April,
suggesting government measures aimed at reining in the world's
third-largest economy were bearing fruit, an independent survey
showed Tuesday 4 May.
The HSBC China Manufacturing PMI, or purchasing managers index,
fell to 55.4 in April from 57.0 in March.
The April figure marked the 13th straight month of expansion but
was the lowest reading in six months, the bank said. A reading
above 50 means the sector is expanding, while below 50 indicates an
overall decline.
"April's PMI points to a moderate slowdown in the expansion of
manufacturing activity," said HSBC chief economist Qu
Hongbin.
"We see this as good news because it means that Beijing's policy
tightening is starting to cool the overheated economy, which will
help to contain inflationary risk in the coming
quarters."
A separate survey released by a government agency on Saturday 1 May
showed manufacturing activity had accelerated to 55.7 in April from
55.1 in March.
HSBC's results are based on interviews with purchasing managers at
more than 400 companies, while the survey by the China Federation
of Logistics and Purchasing covers more than 700 firms.
Both surveys showed a sharp increase in input prices, reflecting
higher costs for raw materials such as copper, cotton, oil and
steel.
"Average input costs faced by Chinese manufacturing firms rose for
the tenth successive month in April, increasing at a considerable
rate that was the fastest in three months," HSBC said.
The Chinese government agency warned that pressure on production
costs was expected to "increase significantly" in the coming months
and could fuel inflationary pressures.
"We need to pay close attention to the difficulties that companies
are facing," government analyst Zhang Liqun said in a commentary
released with the data.
On Sunday 2 May, Beijing announced fresh measures to rein in bank
lending to calm inflationary pressures and avoid a damaging bubble
in the real estate market.
China's economy grew by a blistering 11.9 percent in the first
quarter of 2010, fuelling fears the booming economy was at risk of
overheating.