BEIJING — China’s official tally of factory output slowed in July, a worrying sign for those concerned about a potential slump in the world’s second-largest economy.
According numbers released by the National Bureau of Statistics, China’s purchasing managers’ index dropped from 50.2 in June to 50.1 in July. The decline was slight, but it brought the index closer to the dreaded 50 mark, below which the manufacturing sector is considered to be contracting rather than expanding. The official numbers clocked in at their lowest level in eight months.
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The British bank HSBC’s own version of the purchasing managers’ index was at 49.2 for July, a welcome expansion from earlier figures but still below the 50 mark and lower than China’s own numbers.
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A day before the latest economic data was released, the Communist Party of China’s Central Committee, the country’s main governing body, released a notice that economic growth and stability were its top priorities. After a meeting led by President Hu Jintao, the Central Committee published a statement saying that China’s economy is on track for continued growth, but global economic conditions are challenging.
“We should observe the problems and risks, strengthen risk awareness and make good preparations,” the statement said. “We should remain firmly confident in our efforts to promote steady and relatively fast economic growth.”
China has faulted slowed orders from the United States and Europe for a continued sagging manufacturing sector. Since the global economic meltdown of 2008, the country’s production sector has tried to replace diminished demand from the West with domestic and developing markets, but those have not yet reached the heady pace set by the U.S. and Europe in the early 2000s.
The Chinese central bank has already lowered interest rates twice this summer in response to economic slowing, and more cuts could be on the horizon.