China′s manufacturing sector remains lackluster | Business| Economy and finance news from a German perspective | DW | 01.04.2015
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China's manufacturing sector remains lackluster

Pressure is mounting on Beijing to take more action, as the world's second-largest economy continues to slow. The latest surveys have indicated China's manufacturing remains lackluster.

China's manufacturing sector continues to struggle in March, two key surveys showed on Wednesday, adding more pressure on Beijing to shore up the world's second-largest economy through more policy support.

The official Purchasing Managers' Index (PMI) pointed to sluggish growth in the manufacturing sector, as February's 49.9 reading edged up to 50.1 in March, the National Bureau of Statistics said. A reading above 50 indicates expansion, while a reading below 50 suggests contraction.

But a smaller, private survey of China's manufacturing sector showed it contracted in March after two months of recovery. The PMI index by the financial services company HSBC logged a final number of 49.6 in March, down from February's 50.7.

HSBC added it was the 17th straight month of contraction for the employment component of its index, with companies shedding jobs at their fastest rate in seven months.

"The latest data indicate that domestic and foreign demand remains subdued amid weaker market conditions," Markit economist Annabel Fiddes said.

Analysts believe the combined surveys suggest economic growth in the world's second largest economy may have dipped below 7 percent in the first quarter of 2015 - the weakest in six years - and expect Beijing will respond with easing policies in the second quarter.

The central bank cut interest rates twice since October after China's economy grew 7.3 percent in the final quarter of last year. Many economists believe further interest rate cuts are on the cards later this year.

The official PMI focuses on larger, state-owned firms, while the one by HSBC examines small and mid-sized firms, which usually face greater stresses like high financing costs.

el/ng (dpa, Reuters, AP)

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