China HSBC factory PMI dips to 3 month low in December

Tags: China HSBC, PMI, News
China's factory activity expanded at the slowest pace in three months in December, weighed down by shrinking export orders, a private survey showed on Thursday, consistent with views the economy's growth rate has moderated into the end of the year.

The final HSBC/Markit manufacturing Purchasing Managers' Index (PMI) slipped to 50.5 in December from 50.8 in November, unchanged from a preliminary reading.

"The recovering momentum since August 2013 is continuing into 2014, in our view," said Hongbin Qu, chief China economist at HSBC.

"With inflation still benign, we expect the current monetary and fiscal policy to remain in place to support growth," he added.

A sub-index measuring new export orders touched a four-month low of 49.1 in December, the first time since August that it dropped below the 50-point watershed that separates expansion from contraction, suggesting unsteady external demand.

China's total exports and imports are expected to reach $4.14 trillion in 2013, Commerce Minister Gao Hucheng has said. That would indicate annual trade growth of 7%, a touch lower than the official target of 8%.

The PMI survey also showed the output sub-index eased in December from November's eight-month high, showing moderate growth.

China's official manufacturing PMI, released on Wednesday, showed growth in factories slowed slightly in December as export orders and output weakened, though the figure remained above the line separating expansion from contraction.

Beijing has made it clear that it would accept slower growth as it pushes ahead with structural reforms to steer the world's second-largest economy towards more sustainable growth after three decades of breakneck expansion.

Top leaders have pledged to maintain prudent monetary policy and proactive fiscal policy in 2014 to achieve reasonable economic growth.

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