BEIJING--A closely watched gauge of China's manufacturing
activities showed sluggish growth for a second straight month,
indicating that the world's second-largest economy still faces
downward pressure.
Uncertainties have been hovering over the Chinese economy as
recent economic data ranging from industrial production and energy
consumption to fixed-asset investment point to further weakness.
Many economists believe they show the Chinese economy stumbled in
the third quarter after a slight rebound in the second quarter.
Beijing has refrained from using massive stimulus measures to prop
up growth.
The HSBC China Manufacturing Purchasing Managers' Index, a
measure of nationwide manufacturing activity, was unchanged from
August at a final reading of 50.2 in September, HSBC Holdings PLC
and data provider Markit said Tuesday. The final reading was
slightly lower than HSBC's preliminary September PMI of 50.5,
announced last week.
A reading below 50 indicates a contraction in manufacturing
activity from the previous month, whereas a reading above that
indicates expansion.
"The data in September suggest that manufacturing activity
continues to expand at a slow pace," said HSBC China Chief
Economist Qu Hongbin. "We think risks to growth are still on the
downside and warrant more accommodative monetary as well as fiscal
policies."
Mr. Qu said the subindexes for output and new orders were both
revised down in the final reading, while the new export-orders
subindex rose to its highest reading since March 2010 thanks to
stronger demand from abroad.
Zhang Fan, an economist at CIMB, said the HSBC PMI showed that
Chinese domestic growth momentum remained weak in September and
will drag down economic growth in the third quarter.
Exports were the main bright spot in the PMI reading, helping to
compensate for sagging domestic demand, Mr. Zhang said.
China's economy grew 7.4% in the first quarter and then
rebounded slightly to 7.5% in the second, but both were well below
last year's 7.7% growth rate. China is scheduled to report the
third quarter's gross domestic product on Oct. 21.
"Beijing needs more targeted easing measures on both monetary
and fiscal fronts to keep the growth from further deceleration,"
said Mr. Zhang.
Economists have been worrying that China may miss its annual
growth target of 7.5% this year for the first time since the Asian
financial crisis, but policy makers have publicly ruled out another
massive stimulus program like the one launched during the global
financial crisis. That program saw China safely through the global
downturn but left a legacy of bad debt and led to overcapacity
problems in many industries.
China's leaders have said a growth rate "slightly higher or
lower" than the target is acceptable as long as the economy
generates enough jobs. However, the continued slowdown in growth
may eventually endanger that goal.
HSBC said that "companies continued to cut their staffing levels
in September at a modest pace" despite higher volumes of new work.
China's official urban unemployment rate has been stuck at a level
of around 4% for years, but that gauge is widely regarded as an
unreliable measure. A sharp decline in employment could raise alarm
bells and prompt the government to take more aggressive actions,
analysts said.
China's government has so far stuck with what they call targeted
easing measures to keep growth on track. In the latest move, the
People's Bank of China earlier this month injected a total of 500
billion yuan ($80.6 billion) liquidity into the country's top four
state-owned banks, in a bid to keep borrowing costs down and
support sluggish economic growth.
Grace Zhu