Chinese manufacturing activity fell to a four-month low in March, confirming once again the fears of a slowdown of the second largest economy in the world. HSBC's preliminary Purchasing Managers' Index (PMI) fell to 48.1 this month from 49.6 in February, following a sharp decline in exports. These data add pressure on politicians to pursue monetary policy easing just days after statements by mining giant BHP Billiton revealed that Chinese demand for iron ore - a key raw material for manufacturing - is flattening.
This is just the latest negative news from China, after the unveiling of the trade deficit in February and Beijing's decision to set a growth target of 7,5% for this year, against 9,2% in 2011 and 10,4% in 2010. “Investors they were already pessimistic – comments Shen Jun, an analyst at BOC International – and these new bad news certainly don't help”. The new decline in the PMI marks the fifth consecutive month in which the index has contracted, from 47.7 in November last year.
Also read the China Post
