Activity at China’s factories declined yet again in April, the 14th straight month that the country’s manufacturing sector has deteriorated, according to a private survey released yesterday that reinforced worries about the slowing Chinese economy.
Orders have stagnated, export work continued to fall and jobs are being shed at a faster rate, according to the Caixin China manufacturing purchasing managers’ index, which tracks factory output from 420 businesses, most of which are small and medium-sized private companies.
April’s PMI fell to 49.4 from 49.7 in March and failed to meet economists’ expectations of 49.9. The index’s break-even point is 50, separating expansion from contraction.
The survey followed Sunday’s release of the government’s official PMI, which focused on larger, state-owned factories. It fell to 50.1 in April, from 50.2 in March.
The figures took the shine off promising data from March and revealed Beijing’s challenge to sustain economic growth as its splashes out on public works and expands credit but also faces over-capacity in the iron and steel industry.
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“The fluctuations indicate that the economy lacks a solid foundation for recovery and is still in the process of bottoming out,” He Fan, Caixin’s chief economist, said. “The government needs to keep a close watch on the risk of a further economic downturn.”
The International Monetary Fund is predicting that China’s economy will expand by 6.5 per cent this year and by 6.2 per cent in 2017.