An employee works in the workshop of a textile factory in Huaibei, Anhui Province, March 25, 2011.
Credit: Reuters/StringerBy Simon RabinovitchBEIJING | Sun 1 May 2011, 6: 24 am EDT
BEIJING (Reuters)-China's manufacturing growth slowed in April, a survey showed on Sunday, suggest that tightening efforts of the Government have weighted DPS World's second largest economy heavier than expected.
The official purchasing managers index fell to China in April of 53.4 52.9 in March, well shy of market forecasts of an increase to 54.0.
The survey, which is designed to be a snapshot of conditions in China's huge manufacturing industry, was largely in line with a separate PMI sponsored by HSBC published on Friday which clung near a seven-month low on 51.8 in April.
With inflation running at its fastest in nearly three years, that China has a series of policy measures taken to curb prices, requires raising interest rates and the banks reserves multiple times, ordering banks to borrow less and accelerate the pace of currency appreciation.
On the positive side of the great book the official PMI showed that these steps at least partially have hit the mark. A sub-index measuring input prices dropped to 66.2 in April, a seven-month low, from 68.3 in March.
But the survey also flashed worrying signals for the global economy, one that is ever more reliant on Chinese demand has become as a source of growth with the United States, Europe and Japan still struggling to recover from the financial crisis.
"Overall, the PMI shows there is still a possibility that the Chinese economy might slow down, especially if falling demand growth leads to changes in stocks, raising the possibility of slowing economic growth," said Zhang Liqun still, a researcher of the Government.
The new orders sub-index weakened on an eight-month low of 53.8 in April from 55.2 in March. Much of that drop was driven by slower growth in export orders, whose sub-index immersed until 51.3 of 52.5.
"The fall show that export growth will continue to slow down," Zhang said in a comment on behalf of the China Federation of logistics and purchasing, which compiles the official PMI.
STILL ROBUST GROWTH
Despite the continued tightening of Beijing campaign over the past six months expect economists surveyed by Reuters still the Chinese economy to expand at a pace nearly double digits this year. They predict that the 9.5% in 2011 after last year's 10.3% expansion will grow.
In a measure of that robust momentum was the 26th consecutive month that the official PMI stood above the threshold of 50 that enlargement of contraction.
The world bank said on Thursday that it is too early for China to stop its policy tightening as it raised its annual-average inflation forecast in a quarterly review of the economy.
Stubborn price pressures have sparked market talk that Beijing the yuan to rise at a faster clip could, or even more drastic measures by pressing by means of a large revaluation of the currency.
The Government has in the past consistently excluded a one-time revaluation, say that there are no grounds for a major shift in exchange rate policy. Still showed his appetite for a stronger yuan gradually in recent weeks by guiding to a succession of record highs against a weak dollar.
Investors are waiting for the next round of the Chinese monetary tightening. The central bank has raised interest rates four times since October and economists surveyed by Reuters expect another increase in the next two months.
(Additional reporting by Sally Huang; Edit by Benjamin Kang Lim)
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