China manufacturing expands as growth slows

Beijing, May 1 (Xinhua-ANI): China's Purchasing Managers Index (PMI), a preliminary readout of manufacturing activities, rose in April for the fifth consecutive month, new data showed on Tuesday.

The PMI climbed to 53.3 percent in April 2012, 0.2 percentage point higher compared to that of March, according to figures from the China Federation of Logistics and Purchasing (CFLP).

However, the rate of growth slowed from March, which saw an increase of 2.1 percentage points from February. The April PMI was also higher compared to the same period last year, which stood at 52.9 percent.

From November to March, PMI rose steadily-from 49 percent to 50.3 percent, 50.5 percent, 51 percent and 53.1 percent. A reading of 50 percent demarcates expansion from contraction.

"The continuous rebound of PMI shows that China's economic growth is in a stable and upbeat condition," CFLP vice chairman Cai Jin said.

The sub-index for manufacturing rose to 57.2 percent in April, up 2 percentage points from March, the federation said.

The sub-index for new export orders hit 52.2 percent, up 0.3 percentage point from March. However, the sub-index for new orders fell 0.6 percentage point to 54.5 percent, it said.

The sub-index for large and medium-sized enterprises rose 0.3 percentage point to 53.7 percent, which was a major boost to the overall reading of PMI in April, the figures showed.

Meanwhile, the sub-index for small enterprises fell 1.8 percentage points to 49.1 percent.

The sub-index for raw material purchasing prices started to drop in April after rising continuously for four months. The data fell to 54.8 percent last month, down 1.1 percentage points compared to March.

Cai noted that the downward movement of the sub-index for purchasing prices had signalled that price pressure would to some extent decline from previous high levels.

A report last week by the Bank of Communications forecast the consumer price index, a main gauge of inflation, was likely to fall to 3.3 percent in April from 3.6 percent registered in March.

"The PMI has continued to increase in April, however, the growth rate dipped significantly. The new orders sub-index also dropped. This showed uncertainties still existed in the economy," the statement quoted Zhang Liqun, a researcher with the Development Research Center of the State Council, as saying.

Zhang said the growth rates of China's exports, investment and consumption in the first quarter of this year all dropped compared to the same period last year. Weaker demand as reflected by falling new orders signaled that economic growth would be likely to further slow in the future.

The country's gross domestic product expanded 8.1 percent year on year in the first quarter, the slowest growth in nearly three years.

The CFLP Tuesday report also said that the PMI for only the sectors of chemical raw materials and products, special equipment making, auto making and oil processing stayed below 50 percent last month.

Currently, the CFLP measures PMI for the manufacturing sector based on 820 sample companies nationwide.

The country plans to expand the sample size to around 3,000 companies, according to a previous statement from the National Bureau of Statistics and the CFLP, which, however, have not specified any timetable for the change. (Xinhua-ANI)