China manufacturing growth in slowdown

 

 A sustained recovery in China's manufacturing sector is key to its economic growth

China has reported a slowdown in manufacturing growth, underlining the challenges its new leaders face in spurring economic growth.

China's Purchasing Managers' Index (PMI), which surveys big firms, fell to 50.4 in January from 50.6 in December.
However, HSBC said its PMI for China, which surveys smaller firms, rose to 52.3 in January, from 51.5.
Analysts said volatility in the two measures was normal and the underlying trend was that of a recovery.
The PMI is a key indicator of activity in the sector and a reading above 50 shows expansion.
"The economy is in the midst of mid-cycle upswing... there is sufficient economic momentum and political impetus to ensure a continuation of the current expansionary phase," said Alistair Thornton, senior China economist at IHS Global Insight.
He added that manufacturing activity usually slows around the Chinese New Year, while a colder-than-normal winter had caused problems for some firms.
The political situation may also have had an impact, he said.
"Businesses may be taking a wait-and-see attitude prior to the government transition in March.
"It is important not to rush to the conclusion that the economy is taking a nose-dive again."

Posted in: World business