Global Courant
Factory activity in China contracted for a third month in June, according to official data released on June 30, 2023. Weak economic data for China in April and May fueled calls for economic stimulus for the world’s second-largest economy.
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Factory activity in China contracted for a third month in June, adding to gloom over weak growth in the world’s second-largest economy and likely fueling calls for further stimulus.
The official purchasing managers’ index (PMI) for manufacturing came in at 49.0 in June — compared to 48.8 in May and 49.2 in April — according to National Bureau of Statistics data released Friday. The June reading was in line with the median forecast in a Reuters poll.
Friday’s data also showed that China posted its weakest official PMI reading for non-manufacturing companies this year, at 53.2 in June – compared to 54.5 in May and 56.4 in April.
A reading above 50 indicates an increase in activity, while a reading below that level suggests contraction.
“Economic momentum in China is still quite weak. Recent data shows that the global economy is slowing, which is likely to put further pressure on foreign demand in the coming months,” said Zhang Zhiwei, President and Chief Economist of Pinpoint Asset Management.
“On the other hand, the government’s growth target of 5% this year is quite modest given the low base last year. It is not clear whether the weak economic data would prompt the government to launch aggressive stimulus measures anytime soon,” he added up to it.
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The Hang Seng index and the CSI300 index, which consists of the largest listings in Shanghai and Shenzhen, reversed losses and rose marginally in early trading on Friday after PMI data was released. The Chinese Yuan impaired.
Economic growth in April and May was weaker than expected, increasing calls for bolder monetary measures to support Chinese growth as a long-awaited post-Covid rebound disappointed.
However, Chinese Premier Li Qiang said on Tuesday that his country is still on track to meet its annual growth target of about 5% – a modest target after China grew just 3% last year, one of its weakest results in nearly half a century .
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(TagsToTranslate)Asia Economy
