BEIJING--A closely watched early indicator of Chinese
manufacturing activity rose in September, data showed Tuesday, a
welcome sign given the struggles of the world's second-largest
economy.
Improved sentiment on the factory floor comes as economists and
investors look to China to give the global economy a push. In
August, China's industrial production, energy consumption and
fixed-asset investment all weakened, while the housing market is
slumping. These have been tempered somewhat by strong growth in
exports and steady performance in retail and services.
"Economic activity in the manufacturing sector showed signs of
stabilization in September," HSBC economist Qu Hongbin said.
"Overall, the data still point to modest expansion. The property
downturn remains the biggest downside risk to growth," Mr. Qu
added.
The preliminary HSBC China Manufacturing Purchasing Managers
Index rose to 50.5 in September, compared with a final reading of
50.2 in August, HSBC Holdings PLC and data provider Markit said
Tuesday.
The HSBC/Markit gauge tends to reflect sentiment among smaller,
private companies. China's official PMI reading, which is due on
Oct. 1, focuses more on large, state-owned companies. A reading
above 50 indicates expansion from the previous month, while a
reading below 50 indicates contraction.
HSBC said the subindexes covering both new orders and new export
orders increased at a faster pace, while the employment subindex
continued to decline.
Tuesday's results follow comments by Finance Minister Lou Jiwei
at the Group of 20 meeting last weekend repeating Beijing's message
that the government wouldn't resort to broad-based stimulus
measures. Mr. Lou added that Beijing was focused on several
economic indicators and that a shortfall in one area wouldn't
necessarily force a policy response.
The China Beige Book survey of bankers and 2,000 companies, a
broader look at the economy also released Tuesday, suggests that
Asia's largest economy continued to struggle in the third quarter,
with year-over-year deterioration in a range of sectors from
apparel and autos to furniture and luxuries.
Factory owners faced headwinds, although not as pronounced as in
the third quarter of 2013, the survey found, as new domestic orders
decelerated. But a recovery in services in the third quarter
prevented the economy from decelerating further. While much has
been made of China's stimulus efforts, there is little evidence
that a great deal of this is coursing through the economy, the
beige book survey found, amid more weakness in capital
investment.
Liyan Qi and Mark Magnier