Manufacturing in China rebounded last month, surveys showed yesterday, easing concerns the economy was heading for a sharp slowdown in the second half of this year.
The turnaround was underpinned by domestic orders, but analysts warned that demand in the US and Europe — major buyers of Chinese-made shoes, electronic gadgets and clothes — would weaken in the coming months.
The HSBC China Manufacturing PMI, or purchasing managers index, rose to a three-month high of 51.9 last month from 49.4 in July.
A separate survey published by a government agency — the China Federation of Logistics and Purchasing (CFLP) — showed manufacturing activity reached 51.7 last month compared with 51.2 in July. A reading above 50 means the sector is expanding, while below 50 indicates a decline.
“This [data] reconfirmed our long-held view that China is moderating rather than melting down,” said Qu Hongbin (屈宏斌), chief economist at HSBC in Hong Kong.
“Domestic demand will be resilient to uphold around 9 percent GDP [gross domestic product] growth in the second half and 2011, while export demand is more likely to turn worse in the coming months,” he said.
Government analyst Zhang Liqun (張立群) said the moderate rebound in manufacturing suggested there would not be a “big correction in the Chinese economy.”
China’s economy slowed in the second quarter, growing 10.3 percent compared with a blistering 11.9 percent in the first three months as government efforts to rein in soaring property prices started to bite.
Strong domestic orders saw the level of new business taken on by Chinese manufacturers rise moderately last month, following two successive months of contraction, Qu said.
“The overall rise in new work centred on the domestic market, with new export business falling slightly for a third month in succession,” Qu said. “Those respondents that reported a drop in foreign order levels generally attributed this to softer demand from external markets.”
Analysts warned the manufacturing sector would face weaker demand in major export markets in the second half as the US struggles to recover from the global recession and Europe deals with its debt crisis.
“It is not time to open the champagne just yet,” said Brian Jackson, a Hong Kong-based senior emerging markets strategist at Royal Bank of Canada, referring to the rebound in manufacturing activity.
“We expect China will have a relatively moderate slowdown over the second half of 2010, but weaker external demand from the United States and Europe still represent a significant downside risk in coming months,” he said.
HSBC’s results are based on interviews with purchasing managers at more than 400 companies, while the CFLP survey covers more than 700 firms.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
RSS