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China manufacturing growth slows further

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by Kay Mitchell
”China

Manufacturing activity in China eased further 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 50.7 last month from June’s reading of 50.9.

Secondly, the HSBC China Manufacturing PMI also suggested activity is slowing with the index falling to 49.3 from June’s reading of 50.1 – the lowest level since March 2009.

This index has now fallen below the crucial 50 level, which separates growth from contraction.

The slowdown in growth has been attributed to a weakening in demand for exports.

China’s Government has been taking steps to cool the world’s second largest economy and rein in stubbornly high inflation – which is currently at a 3-year high.

Measures include slowing economic activity and lifting interest rates and the steps appear to be taking effect.

Meanwhile, the Government is continuing with initiatives to curb property prices, by introducing taxes, while it has made it more expensive to buy second homes by lifting the minimum down payment.

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

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News posted: August 1, 2011

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