BEIJING: China’s manufacturing activity expanded slightly in March, independent figures showed Saturday, suggesting steady but slowing growth in the world’s second-largest economy. The figures compare with an official reading Friday hinting that a years-long growth slowdown in China may be easing, though concerns remain about the outlook for world trade in light of US President Donald Trump’s protectionist policies. Investors closely watch the private Caixin Purchasing Manager’s Index (PMI) — an indicator of conditions at small manufacturers — as a sign of the country’s economic health each month. The figure came in at 51.2 for March, down from 51.7 in February but still among the highest seen over the past four years. A PMI figure above 50 marks growth while anything below points to contraction.
The Chinese financial magazine said the one-year outlook for growth remained strong and jobs were cut at a marginal pace. However, it added that more manufacturers showed cautionary attitudes toward inventories and new export sales increased at their weakest pace in three months. “Overall, the Chinese manufacturing economy continued to improve, but signs of a weakening have started to emerge ahead of the second quarter,” Caixin analyst Zhong Zhengsheng said in a joint statement with data compiler IHS Markit. “Downward pressure may further increase.” On Friday, official figures focusing on larger factories and mines came in at 51.8, slightly beating the 51.7 forecast in a Bloomberg News survey and up from the previous month’s 51.6.
Beijing has said it wants to reorient the economy away from debt-fuelled investment towards a consumer-driven model, but the transition has proved bumpy, leading to the slower growth readings in recent years. A vital engine of global growth, China’s economy expanded 6.7 percent for all of last year, the slowest rate in a quarter of a century. Premier Li Keqiang warned last month the economy faced severe challenges, signalling a further deceleration as he announced a trimmed 2017 GDP growth target of “around 6.5 percent.” There is also uncertainty about the future owing to Trump’s promises to revise global trade deals and his past accusations of China being a currency manipulator. Chinese President Xi Jinping is pencilled in to meet Trump in Florida next week, when trade and economic issues are expected to dominate the agenda.
