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Chinese manufacturing slowdown revealed

Article By: ,  Financial Analyst
May 13, 2014 12:15 PM

Official figures released in China show there was a slowdown in the growth of its manufacturing sector over the course of April.

Data from the country's official statistics body recently showed a rebound in exports and imports in the Asian nation, but this has not been backed up by the latest manufacturing figures.

Estimates had suggested there was going to be an 8.9 per cent rise in manufacturing over the course of last month, but the official data showed this figure was actually just 8.7 per cent.

Forecasts were also missed for retail sales and fixed-asset investment spending and this has prompted more speculation that the Chinese economy could be heading for a period of slowdown, which could have a knock-on impact on global markets.

China is aiming for economic growth of 7.5 per cent for the year, but there are fears this target is going to be missed unless the manufacturing industry can be kickstarted in the coming months. Manufacturing is typically one of the industries that tallies mostly closely with the overall state of an economy.

Retail sales

Data released by China's National Bureau of Statistics revealed there was an 11.9 per cent increase in retail sales during April. This was also below the estimates of analysts, who had expected this rise to be in excess of 12 per cent for the month.

Zhiwei Zhang, chief China economist at Nomura, told BBC News that he is predicting "activity indicators to continue to weaken in May". He added: "The pressure for more policy easing continues to build, though in his latest speech People's Bank of China Governor Zhou Xiaochuan indicated that the government may want to wait for more data before deciding whether to ease policy or not."

Exports were recently announced to be up by almost one per cent from a year earlier, with the release of official data indicating that there was also a 0.8 per cent increase in imports to the Asian nation. Wei Yao, China economist at Societe Generale in Hong Kong, said at the time: "The external demand side is not such a big problem for China now, because the genuine recovery is there. This is actually offering some support to China's growth."

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