Shanghai — China's manufacturing activity fell to a seven-month low in June, official figures showed yesterday, despite government efforts to arrest a slowdown in the world's second largest economy.
The official purchasing managers' index (PMI) slipped to 50.2 in June from 50.4 in May, industry group the China Federation of Logistics and Purchasing said in a statement.
The June figure marked the lowest reading since November last year, when PMI hit 49, according to previously released data. A PMI reading above 50 indicates expansion, while a reading below 50 means contraction.
Analysts saw a glimmer of hope in the latest figure, as it was better than expected, but they believe the government must further ease monetary policy to avert a sharp slowdown in economic growth.
"June PMI continued to fall, but with an obviously smaller margin, which indicates the fall in economic growth may stabilise," Zhang Liqun of government think-tank the Development Research Centre said in the statement.
In May, the PMI index fell nearly three percentage points from April.
For June, economists had forecast the index would fall below 50 for the first time since November, predicting an average 49.8, Dow Jones Newswires said.
Zhang, who acts as an analyst for the federation, cited government stimulus policies aimed at spurring investment and boosting domestic consumption as well as a rebound in exports as factors supporting growth.
China on June 8 cut interest rates for the first time in more than three years, while the government has also trimmed the amount of cash banks must keep in reserve three times since December, most recently in May. — AFP