BEIJING Manufacturing activity in China expanded at a slower pace in October, according to two separate surveys of purchasing managers published Tuesday.
The Purchasing Managers' index fell to 54.1 last month from
The CLSA China Manufacturing Purchasing Managers' index fell to 50.1, the lowest in the survey's 19-month history.
"The conditions facing Chinese manufacturers continue to deteriorate," Eric Fishwick, deputy chief economist at CLSA Asia-Pacific Emerging Markets, said in a press release. October's reading "signals that growth apparent earlier in the year and in 2004 has all but petered out."
The reports on Tuesday indicate that the Chinese economy, which has defied predictions of a slowdown for the past year, may be cooling. The economy grew 9.4 percent in the third quarter, the ninth consecutive quarter of expansion exceeding 9 percent, the statistics bureau said Oct. 20, adding that growth would be at least 9 percent in the final three months of this year.
A ballooning trade surplus and rising investment in coal mines and power plants have mitigated government efforts to curb expansion in steel production and property development, allowing China's economy to avoid a sudden slowdown.
"It seems the economy is still in pretty good shape," said Tai Hui, a Hong Kong-based economist at Standard Chartered Bank. "Net exports are still a major contributor."
The Purchasing Managers' index is based on a survey of 730 companies in 20 industries including oil and gas, oil refining, metallurgy, transport equipment and electronics. A reading above 50 reflects expansion in business activity and a reading below
Oil refiners and makers of textiles, electronics and finished metal products were among six categories showing increases compared with September, while the remaining 14 categories slowed, the statement said. Indices for the metallurgy, synthetic fiber and rubber industries were pegged below 50, while the remainder showed expansion, it said.
The survey tracks changes in output, new orders, export orders, employment, inventories, input prices and raw-material prices. CLSA's survey tracks changes in output, new orders, employment, prices, inventories and delivery times at 350 companies.
Profit at manufacturers is being eroded as rising input prices increase their costs while competition pushes selling prices lower, Fishwick at CLSA said in the release. As a consequence, employment fell in October, according to the report.
"In this environment Beijing will be looking for avenues to stimulate growth," Fishwick said. "Expect lower rates and a weaker renminbi during 2006."
The People's Bank of China raised its benchmark one-year lending and deposit rates by 0.27 percentage point to 5.58 percent and 2.25 percent respectively at the end of October 2004, the first increase in nine years, to cool investment and inflation.
BEIJING Manufacturing activity in China expanded at a slower pace in October, according to two separate surveys of purchasing managers published Tuesday.
The Purchasing Managers' index fell to 54.1 last month from
The CLSA China Manufacturing Purchasing Managers' index fell to 50.1, the lowest in the survey's 19-month history.
"The conditions facing Chinese manufacturers continue to deteriorate," Eric Fishwick, deputy chief economist at CLSA Asia-Pacific Emerging Markets, said in a press release. October's reading "signals that growth apparent earlier in the year and in 2004 has all but petered out."
The reports on Tuesday indicate that the Chinese economy, which has defied predictions of a slowdown for the past year, may be cooling. The economy grew 9.4 percent in the third quarter, the ninth consecutive quarter of expansion exceeding 9 percent, the statistics bureau said Oct. 20, adding that growth would be at least 9 percent in the final three months of this year.
A ballooning trade surplus and rising investment in coal mines and power plants have mitigated government efforts to curb expansion in steel production and property development, allowing China's economy to avoid a sudden slowdown.
"It seems the economy is still in pretty good shape," said Tai Hui, a Hong Kong-based economist at Standard Chartered Bank. "Net exports are still a major contributor."
The Purchasing Managers' index is based on a survey of 730 companies in 20 industries including oil and gas, oil refining, metallurgy, transport equipment and electronics. A reading above 50 reflects expansion in business activity and a reading below
Oil refiners and makers of textiles, electronics and finished metal products were among six categories showing increases compared with September, while the remaining 14 categories slowed, the statement said. Indices for the metallurgy, synthetic fiber and rubber industries were pegged below 50, while the remainder showed expansion, it said.
The survey tracks changes in output, new orders, export orders, employment, inventories, input prices and raw-material prices. CLSA's survey tracks changes in output, new orders, employment, prices, inventories and delivery times at 350 companies.
Profit at manufacturers is being eroded as rising input prices increase their costs while competition pushes selling prices lower, Fishwick at CLSA said in the release. As a consequence, employment fell in October, according to the report.
"In this environment Beijing will be looking for avenues to stimulate growth," Fishwick said. "Expect lower rates and a weaker renminbi during 2006."
The People's Bank of China raised its benchmark one-year lending and deposit rates by 0.27 percentage point to 5.58 percent and 2.25 percent respectively at the end of October 2004, the first increase in nine years, to cool investment and inflation.
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