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China's manufacturing growth slows

1 December 2014 09:36

China's factory activity slows further in November from the previous month

China's factory activity slowed by more than expected in November, highlighting how a cooling economy is impacting its vast manufacturing sector.

The official purchasing managers' index (PMI) dipped to 50.3 in November from October's 50.8, closer to the 50 point mark that separates growth from contraction.

It was below the 50.6 level expected by economists.

Rising costs and falling demand were blamed for the downturn in activity.

Meanwhile, a private survey from from HSBC showed that growth in Chinese factories in November stalled as output shrank for the first time in six months.

The final HSBC/Markit manufacturing PMI slipped to a six-month low of 50 in November, down from 50.4 in October. The reading was unchanged from a preliminary "flash" finding released earlier this month.

Output fell to 49.6, which was the worst reading since May.

"Muted growth in new work," led companies to hold back production, HSBC/Markit said.

Boost needed

Growth in the world's second largest economy fell to 7.3% in the third quarter, which was the slowest pace since the global financial crisis.

The risk that China might miss its official growth target of 7.5% this year for the first time in 15 years is growing because economic data is weaker than expected, economists said.

A struggling property market, uneven export growth and cooling domestic demand and investment are some of the major factors weighing on overall growth.

Alaistair Chan, economist at Moody's Analytics, said he had expected the slowdown in manufacturing and was a "little more pessimistic" than the market for two reasons.

"Firstly, there are signs the recent export boom is fading. Meanwhile, the housing market and related sectors such as steel and cement manufacturing, remains in a slump," Mr Chan said.

House prices fall

China's house prices fell on a monthly basis for the seventh straight month in November, a survey showed on Sunday.

The average price of a new home in its 100 major cities was down 0.38% from October, the independent China Index Academy said.

Earlier this month, the country's central bank unexpectedly cut interest rates to 2.75% for first time since 2012 in an attempt to revive the economy.

Mr Chan said Monday's data shows further evidence that fourth quarter growth will be about the same as the third quarter with growth "below China's potential" and the government's target.

"Monetary policy may need further action, possibly with a reserve ratio cut or another interest rate cut, by year end," he said.

-ing is a suffix used to make one of the inflected forms of English verbs. This verb form is used as a present participle, as a gerund, and sometimes as an independent noun or adjective.The –ing form can be used like a noun, like an adjective or like a verb. It can also be part of a 'noun phrase'. As an adjective, the –ing form can be used before a noun, the –ing form is also used after prepositions. Here are the –Ing form from this article:

- as noun

  Highlighting

  Impacting

  Purchasing

  Finding

- as adjective

  Manufacturing

  Cooling

  Rising

  Falling

  Growing

  Struggling

- as verb

  Weighing