CONCERNS for the strength of the Chinese economy were heightened yesterday, as an indicator suggested that the manufacturing sector has contracted in the first quarter.
Markit and HSBC’s manufacturing purchasing managers’ index (PMI) suggests that the country’s colossal industrial sector declined in March, with a score of 48.1, below 50 and indicating a small drop in output.
The headline figure was also below 50 in January and February, indicating that manufacturing was a lag on the economy in the first quarter of the year.
Deutsche Bank’s Jim Reid said the news would be “disappointing to those who expected the PMI to bounce back after potential lunar new year seasonal distortions in January and February’s data.”
International Monetary Fund managing Director Christine Lagarde was also in China yesterday, finishing a three-day visit. Her comments suggested that the country’s future growth will not be secured by manufacturing strength alone.
“Unleashing the potential of the services sector, building a modern financial sector, and promoting inclusive growth, combined with pro-green policies, will help ensure that China achieves such a transformation,” Lagarde said.