China's economy weakens
June 20, 2013
HSBC's China Purchasing Managers' Index (PMI) contracted further to 48.3 points in June from May's reading of 49.2 points, said the private bank, which is based in London.
The threshold of 50 points in the PMI usually demarcates economic growth from contraction.
The weakest reading since September 2012 was caused by reductions in both production and demand in the world's second biggest economy, HSBC China economist Qu Hongbin said in a statement, compounding fears of a fragile recovery in China.
"Manufacturing sectors are weighed down by deteriorating external demand, moderating domestic demand and rising destocking pressures," he added.
In the first quarter of 2013, economic growth in China slowed unexpectedly to 7.7 percent amid weaker factory activity and exports. Nevertheless, the growth figure was still higher than the government's target of 7.5 percent for 2013.
Expecting weaker growth for this year, HSBC economist Qu Hongbin said the government apparently preferred economic reforms to foster long-term growth over short-term stimulus to sustain growth.
uhe/ipj (AP, Reuters)