China Manufacturing Gauge Signals Deeper Slowdown Risk: Economy
2014-05-05 03:16:24.463 GMT
By Bloomberg News
May 5 (Bloomberg) -- China’s manufacturing contracted for a
fourth month in April, according to a private survey that missed
estimates and sent stocks in the region lower on concern the
economy’s slowdown is deepening.
A purchasing managers’ index was at 48.1, HSBC Holdings Plc
and Markit Economics said in a statement today. That compared
with a 48.4 median estimate from analysts surveyed by Bloomberg
News, a preliminary reading of 48.3 and March’s 48. Numbers
below 50 indicate contraction.
Hong Kong stocks extended declines on the report, which
suggests Communist Party leaders have to do more to set a floor
under economic growth after property construction plunged last
quarter and expansion cooled. Gross domestic product is
projected to increase 7.3 percent this year as the government
reins in credit, according to a Bloomberg survey, compared with
an official target of about 7.5 percent.
“There is no substantial improvement in terms of
momentum,” said Ding Shuang, senior China economist at
Citigroup Inc. in Hong Kong. The property-market slowdown is
having “certainly some impact” on manufacturing, said Ding,
who previously worked at the People’s Bank of China and
International Monetary Fund.
The Hang Seng Index fell 1.5 percent at 10:27 a.m. in Hong
Kong and the Hang Seng China Enterprises Index was down 0.9
percent. The Australian dollar dropped 0.2 percent to 92.5 U.S.
cents following the report after earlier rising as much as 0.4
percent.
Support Package
The State Council has outlined a package of spending on
railways and housing and tax relief to support growth and
pledged extra efforts to aid exporters. The central bank has
also lowered the reserve-requirement ratio for some rural banks
by as much as 2 percentage points.
China last lowered the reserve ratio for large banks in May
2012, to 20 percent. The ratio is “relatively high” and
remains a major tool of the nation’s monetary policy, PBOC
officials Sheng Songcheng and Zhang Xuan wrote in an article
dated May 4 in China Finance, a central bank publication.
China Railway Corp. plans to increase this year’s
investment to more than 800 billion yuan ($128 billion) from a
previously announced 720 billion yuan, financial news provider
Caixin reported on its website last week, citing a
videoconference the company held on April 30. The amount had
already been raised twice this year from an original 630 billion
yuan to 700 billion yuan and then to 720 billion yuan, Caixin
said.
Larger Stimulus
At the same time, officials have been pledging to avoid
broader or stronger measures. Finance Minister Lou Jiwei
reiterated that China won’t have short-term, large-scale
stimulus, according to a statement today on the ministry’s
website citing comments made May 3 at a meeting in Astana,
Kazakhstan.
“Beijing has introduced more reform measures which could
support growth by inducing more private-sector investment,” Qu
Hongbin, chief China economist for HSBC in Hong Kong, said in a
statement. “We think bolder actions will be required to ensure
the economy regains its momentum.”
Today’s number compared with a reading of 50.4 in a
manufacturing index released by the National Bureau of
Statistics and the China Federation of Logistics and Purchasing.
HSBC and Markit’s survey indicated the rate of contraction
in output and new orders eased from March, while the pace of job
cuts accelerated. An index of new export orders was below 50,
HSBC and Markit said.
Almost all Chinese provinces failed to meet their growth
targets in the first quarter even after scaling back their
ambitions as the government instructs officials to focus on
reining in debt and curbing pollution.
Thirty of 31 provinces and municipalities reported missing
their goals, with the biggest shortfall in northeastern
Heilongjiang, where an expansion of 4.1 percent compared with an
8.5 percent target for the year. Most localities’ targets are
lower than in 2013.
For Related News and Information:
China’s Expansion Slows as Property Construction Falls: Economy
NSN N446A36S972R <GO>
China GDP Gauge Seen Showing Deeper Slowdown Than Main Data
NSN N42AOA6JTSES <GO>
Zhou Says Normal China Growth Warrants Minor Policy Changes
NSN N3UWH36S972B <GO>
China economic forecasts: ECFC CN <GO>
Most-read stories on China: MNI CHINA 1W <GO>
Most-read China economy stories: TNI CHECO MOSTREAD BN <GO>
Top Stories: TOP <GO>
--With assistance from Chua Baizhen in Singapore and Xiaoqing Pi
in Beijing.
To contact Bloomberg News staff for this story:
Paul Panckhurst in Beijing at +852-2977-6603 or
ppanckhurst@bloomberg.net
To contact the editors responsible for this story:
Stephanie Phang at +65-6499-2617 or
sphang@bloomberg.net;
Paul Panckhurst at +852-2977-6603 or
ppanckhurst@bloomberg.net;
Colin Keatinge at +65-6231-3479 or
ckeatinge@bloomberg.net
Scott Lanman, Rina Chandran
2014-05-05 03:16:24.463 GMT
By Bloomberg News
May 5 (Bloomberg) -- China’s manufacturing contracted for a
fourth month in April, according to a private survey that missed
estimates and sent stocks in the region lower on concern the
economy’s slowdown is deepening.
A purchasing managers’ index was at 48.1, HSBC Holdings Plc
and Markit Economics said in a statement today. That compared
with a 48.4 median estimate from analysts surveyed by Bloomberg
News, a preliminary reading of 48.3 and March’s 48. Numbers
below 50 indicate contraction.
Hong Kong stocks extended declines on the report, which
suggests Communist Party leaders have to do more to set a floor
under economic growth after property construction plunged last
quarter and expansion cooled. Gross domestic product is
projected to increase 7.3 percent this year as the government
reins in credit, according to a Bloomberg survey, compared with
an official target of about 7.5 percent.
“There is no substantial improvement in terms of
momentum,” said Ding Shuang, senior China economist at
Citigroup Inc. in Hong Kong. The property-market slowdown is
having “certainly some impact” on manufacturing, said Ding,
who previously worked at the People’s Bank of China and
International Monetary Fund.
The Hang Seng Index fell 1.5 percent at 10:27 a.m. in Hong
Kong and the Hang Seng China Enterprises Index was down 0.9
percent. The Australian dollar dropped 0.2 percent to 92.5 U.S.
cents following the report after earlier rising as much as 0.4
percent.
Support Package
The State Council has outlined a package of spending on
railways and housing and tax relief to support growth and
pledged extra efforts to aid exporters. The central bank has
also lowered the reserve-requirement ratio for some rural banks
by as much as 2 percentage points.
China last lowered the reserve ratio for large banks in May
2012, to 20 percent. The ratio is “relatively high” and
remains a major tool of the nation’s monetary policy, PBOC
officials Sheng Songcheng and Zhang Xuan wrote in an article
dated May 4 in China Finance, a central bank publication.
China Railway Corp. plans to increase this year’s
investment to more than 800 billion yuan ($128 billion) from a
previously announced 720 billion yuan, financial news provider
Caixin reported on its website last week, citing a
videoconference the company held on April 30. The amount had
already been raised twice this year from an original 630 billion
yuan to 700 billion yuan and then to 720 billion yuan, Caixin
said.
Larger Stimulus
At the same time, officials have been pledging to avoid
broader or stronger measures. Finance Minister Lou Jiwei
reiterated that China won’t have short-term, large-scale
stimulus, according to a statement today on the ministry’s
website citing comments made May 3 at a meeting in Astana,
Kazakhstan.
“Beijing has introduced more reform measures which could
support growth by inducing more private-sector investment,” Qu
Hongbin, chief China economist for HSBC in Hong Kong, said in a
statement. “We think bolder actions will be required to ensure
the economy regains its momentum.”
Today’s number compared with a reading of 50.4 in a
manufacturing index released by the National Bureau of
Statistics and the China Federation of Logistics and Purchasing.
HSBC and Markit’s survey indicated the rate of contraction
in output and new orders eased from March, while the pace of job
cuts accelerated. An index of new export orders was below 50,
HSBC and Markit said.
Almost all Chinese provinces failed to meet their growth
targets in the first quarter even after scaling back their
ambitions as the government instructs officials to focus on
reining in debt and curbing pollution.
Thirty of 31 provinces and municipalities reported missing
their goals, with the biggest shortfall in northeastern
Heilongjiang, where an expansion of 4.1 percent compared with an
8.5 percent target for the year. Most localities’ targets are
lower than in 2013.
For Related News and Information:
China’s Expansion Slows as Property Construction Falls: Economy
NSN N446A36S972R <GO>
China GDP Gauge Seen Showing Deeper Slowdown Than Main Data
NSN N42AOA6JTSES <GO>
Zhou Says Normal China Growth Warrants Minor Policy Changes
NSN N3UWH36S972B <GO>
China economic forecasts: ECFC CN <GO>
Most-read stories on China: MNI CHINA 1W <GO>
Most-read China economy stories: TNI CHECO MOSTREAD BN <GO>
Top Stories: TOP <GO>
--With assistance from Chua Baizhen in Singapore and Xiaoqing Pi
in Beijing.
To contact Bloomberg News staff for this story:
Paul Panckhurst in Beijing at +852-2977-6603 or
ppanckhurst@bloomberg.net
To contact the editors responsible for this story:
Stephanie Phang at +65-6499-2617 or
sphang@bloomberg.net;
Paul Panckhurst at +852-2977-6603 or
ppanckhurst@bloomberg.net;
Colin Keatinge at +65-6231-3479 or
ckeatinge@bloomberg.net
Scott Lanman, Rina Chandran