Tags: China | Manufacturing | Weakest

China’s Manufacturing Contracts for First Time Since 2009

Thursday, 01 Dec 2011 07:17 AM

China’s manufacturing contracted for the first time since February 2009 as the property market cooled and Europe’s crisis cut export demand, a survey showed.

The Purchasing Managers’ Index fell to 49.0 in November from 50.4 in October, the China Federation of Logistics and Purchasing said in a statement today. The median estimate in a Bloomberg News survey of 18 economists was 49.8. A level above 50 indicates expansion.

The central bank last night announced the first cut in banks’ reserve requirements since 2008, moving two hours before the U.S. Federal Reserve led a global effort to ease Europe’s sovereign-debt crisis. The move will add about 370 billion yuan ($58 billion) to the financial system and more reductions may follow as the government seeks to support growth, Citigroup Inc. said.

“China’s economic growth faces significant downside risks in the first half of 2012,” Zhang Zhiwei, chief China economist at Nomura International Hong Kong Ltd., said before today’s release. “The property sector has reached a tipping point and exports are set to weaken,” said Zhang, who previously worked at the International Monetary Fund.

The Shanghai Composite Index fell 3.3 percent yesterday, the biggest decline in almost four months. India yesterday reported that its economy grew the least in two years and Thailand cut interest rates as a slowdown in Asia limits the region’s ability to support a faltering world recovery.

Weaker Demand

The manufacturing index compiled by the logistics federation and National Bureau of Statistics is based on a survey of purchasing managers in more than 820 companies in 20 industries.

JinkoSolar Holding Co., a Chinese maker of solar panels, said last week third-quarter net income fell 74 percent from a year earlier on slumping prices. The company, based in eastern Jiangxi province, also cut its full-year shipment estimate by as much as 23 percent citing weaker demand from Europe.

“China’s growth will slow further over the next six months,” Li Wei, a Shanghai-based economist with Standard Chartered Plc said before the data. “If the deterioration in Europe and the U.S. accelerates in the first half of next year, the government will have to put maintaining growth as its top priority.”


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China s manufacturing contracted for the first time since February 2009 as the property market cooled and Europe s crisis cut export demand, a survey showed. The Purchasing Managers Indexfell to 49.0 in November from 50.4 in October, the China Federation of Logistics and...
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2011-17-01
Thursday, 01 Dec 2011 07:17 AM
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