China Manufacturing Weakens Further in July as Slowdown...

China Manufacturing Weakens Further in July as Slowdown Deepens

China’s manufacturing weakened further in July, signaling the worst of the nation’s slowdown has yet to be reached, according to a preliminary survey of purchasing managers.
The preliminary reading of 47.7 for a Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics compares with the 48.2 median estimate in a Bloomberg News survey of 19 economists and 48.2 in June. Readings below 50 indicate contraction.
Extended weakness in production underscores Premier Li Keqiang’s challenge in meeting this year’s 7.5 percent economic growth target, with the government signaling this week that it may accept as little as 7 percent in the future. It may also boost pressure on policy makers to accelerate a shift toward consumption to sustain expansion in the longer term.
“It’ll be very difficult for industrial production to achieve the 10 percent target this year” for growth, Dariusz Kowalczyk, Hong Kong-based senior economist at Credit Agricole CIB, said before the release. “But we think that in the fourth quarter there will be some rebound in manufacturing activity because of the stimulative measures we expect.”