China manufacturing industry: Sector contracts for 11th straight month

New export orders fell at the fastest rate in 42 months, says HSBC.

BEIJING: China’s manufacturing activity shrank for an 11th straight month in September, HSBC said Saturday, adding to pressure on Beijing to provide fresh stimulus to boost the world’s second largest economy. The final reading of the purchasing mangers’ index (PMI) released by the British banking giant hit 47.9 this month, a mild improvement from a final reading of 47.6 in August, HSBC said in a statement. The index is closely watched as it gauges nationwide manufacturing activity, a key sector of the Chinese economy. A reading below 50 indicates a contraction in manufacturing, while a reading above 50 indicates expansion. The latest figure marked nearly a year of continuous contraction since November, underscoring broader economic weakness and shrinking demand in key overseas markets. New export orders fell at the fastest rate in 42 months, HSBC said, indicating economic weakness in major export markets such as the United States and Europe were continuing to weigh on the Chinese economy.

Published in The Express Tribune, September 30^th, 2012.