China Manufacturing Unexpectedly Contracts in Blow to Growth
By Bloomberg News - May 23, 2013 3:48 AM ET
China’s manufacturing is contracting in May for the first time in seven months, adding to signs that economic growth is losing steam for a second quarter.
The preliminary reading of 49.6 for a Purchasing Managers’ Index (SHCOMP) released today by HSBC Holdings Plc and Markit Economics compares with a final 50.4 for April. The number was also below the 50.4 median estimate in a Bloomberg News survey of 13 analysts. A reading above 50 indicates expansion.
Asian stocks slumped after the data, which may test the new government’s commitment to tolerate slower growth after Premier Li Keqiang last week signaled reluctance to add stimulus. Investors soured on China’s outlook in a Bloomberg global poll this month, with the share of respondents who see the economy deteriorating doubling from January.
“The slowdown is really bad,” said Ken Peng, a BNP Paribas SA economist based in Beijing. “It’s a big probability now that China’s GDP growth rate in the second quarter will be lower than in the first quarter,” he said, referring to gross domestic product.
The MSCI Asia Pacific Index of stocks fell 3.6 percent as of 4:03 p.m. in Tokyo, headed for the biggest loss since September 2011, as Japan’s Topix Index closed down 6.9 percent, the most since the aftermath of the Fukushima disaster in March 2011. The Australian dollar and copper also declined. The benchmark Shanghai Composite Index of stocks fell 1.2 percent at the close, the largest drop in a month.
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http://www.bloomberg.com/news/2013-05-23/china-manufacturing-contracts-for-first-time-in-seven-months.html
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