China manufacturing growth slows further

| July 1, 2011 | 0 Comments

Manufacturing activity in China eased last month, two separate surveys have revealed today.

Firstly, the official China Federation of Logistics and Purchasing (CFLP) said its purchasing managers index (PMI) fell to 50.9 in June from May’s reading of 52 – the lowest level since February 2009.

The reading was also lower than expectations of a reading of 51.5.

Secondly, the HSBC China Manufacturing PMI also suggested activity is slowing with the index falling for the second month in a row to an 11-month low of 50.1, from 51.6 in May.

However, both indices remain above the crucial 50 level, which separates growth from expansion.

Both reports suggest attempts to cool the world’s second largest economy, by the country’s Government, are taking effect.

However, the economy remains robust and is not at risk of overheating, according to analysts.

In other news today, figures showed house prices in China eased in 8 of the country’s 10 largest cities.

The Government said it will continue with initiatives to curb prices such as a property tax, while it has made it more expensive to buy second homes, by lifting the minimum down payment.

The central bank has also hiked interest rates four times since October, when it increased borrowing costs for the first time in three years.

The initiatives are part of avoiding a property bubble within the housing market.

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