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Chinese manufacturing slowed in June, according to the HSBC China Flash Manufacturing PMI™. The headline figure dropped to a nine-month low of 48.3, down from 49.2 in May.

Output and new orders both fell. New export orders declined at a faster rate, as did employment. The Flash China Manufacturing Output Index dropped to an eight-month low of 48.8, from 50.7 in May.

While reforms can boost long-term growth prospects, they will have a limited impact in the short term

Qu Hongbin,
Chief Economist for Greater China, HSBC

Qu Hongbin, Chief Economist for Greater China and Co-Head of Asian Economic Research at HSBC, said: “The HSBC China Flash Manufacturing PMI™ dropped to a nine-month low of 48.3 in June, following on the sequential reduction in both production and demand. Manufacturing sectors are weighed down by deteriorating external demand, moderating domestic demand and rising destocking pressures.”

He added: “Beijing prefers to use reforms rather than stimulus to sustain growth. While reforms can boost long-term growth prospects, they will have a limited impact in the short term. As such we expect slightly weaker growth in the second quarter.”

The Flash index is published about one week before the PMI™ and is typically based on approximately 85 to 90 per cent of total responses to the PMI™. An index reading above 50 signals expansion, while below 50 signals contraction.

June’s final PMI™ is due for release on 1 July.

The intellectual property rights to the HSBC Flash China Manufacturing PMI™ provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are trade marks of Markit Economics Limited, HSBC use the above marks under license. Markit and the Markit logo are registered trade marks of Markit Group Limited.

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