Chinese Manufacturing Sector Slows Further, Reveals HSBC PMI

Published By : 06 May 2015 | Published By : QYRESEARCH

The slowing Chinese economy has led the policy makers in the country to cut down the interest rates and reduce the reserve requirement ratios of the banks. As per the latest PMI Index released by HSBC Holdings Plc and Markit Economics, the lower reading of 48.9 is indicating the contraction of the economy in the nation. This has been in contrast with the official manufacturing PMI for April, which had suggested stabilization of the economy. The new orders in the manufacturing sector have decreased, leading the Chinese authorities to be concerned about the economic downturn. According to Wang Tao, the chief China Economist at UBS Group AG, the Chinese government would increase investment in infrastructure sector in the next few months, with support from policy banks and would cut the interest rates. 

Though the government has set up the target to achieve 7% economic growth in 2015, the reality is quite different. As more government measures are widely anticipated to bail out the nation from the present economic slowdown, the stocks have climbed up on positive notes. After the PMI Index was released, the Shanghai Composite Index of Stocks initially dropped but recovered to be 0.9% higher. In the wake of the current slowdown, the Communist Party’s leaders are going to meet on Thursday to discuss the measures to combat the situation. The various preventive measures by the authorities include The People’s Bank of China considering using unconventional measures to increase liquidity. Economists are forecasting further rate cuts as stimulus measures. 
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