China’s manufacturing activity came in below initial expectations last month HSBC said Tuesday, adding pressure on Beijing to address slowing growth in the world’s second-largest economy.
The British bank’s final purchasing managers index (PMI), which tracks activity in China’s factories and workshops, came in at 50.2.
However, while the closely watched figure, compiled by information services provider Markit and released by HSBC, is unchanged from August and is above the 50-point level that separates growth and contraction, it is below a preliminary reading of 50.5.
August’s figure was down from an 18-month high of 51.7 in July.
Beijing’s official PMI for August came in at 51.1, down from 51.7 in July.
It is set to release its figure for last month on Wednesday.
“Production increased at the slowest pace in the current four-month sequence of expansion, while job shedding across the sector extended into an 11th successive month,” HSBC said in the statement.
Last week’s initial result had sparked some optimism that China’s economy, a key driver of global growth, may be showing signs of picking up following a string of weak data recently.
China’s economy grew by a stronger-than-expected rate of 7.5 percent in the second quarter, up from 7.4 percent in the previous three months, which was the worst since a similar 7.4 percent expansion in the July-to-September period in 2012.
China is scheduled to announce third-quarter GDP figures on Oct. 21.
Authorities have since April introduced a string of measures including targeted infrastructure spending, small business tax breaks and incentives to spur lending in rural areas and to small companies in a bid to boost growth.
However, with indicators in August pointing to slowing industrial production, retail sales and fixed asset investment, economists have intensified calls for further measures, arguing that the positive effects of the so-called mini-stimulus are receding.
Furthermore, a slowdown in China’s huge property sector is also weighing on overall growth. China’s new home prices fell in August for the fourth straight month, albeit at a slower pace than in July.
“The revisions made for the HSBC final PMI were in line with our view that growth momentum has continued to lose steam in September,” economists at Nomura said in a report.
The property sector is a double-edged sword for China.
The government has in recent years introduced measures to temper soaring prices and appease ordinary citizens hoping to own homes.
However, with those measures kicking in and prices beginning to decline, local governments — which rely on land sales for much of their income — are looking for a loosening of those restrictions.
China’s economic growth target for this year, announced in March, calls for an expansion of about 7.5 percent, the same as last year.
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