China's manufacturing activity deteriorates in April: HSBC

BEIJING - Chinese manufacturing contracted at the fastest rate in a year in April, suggesting continued downward pressure on the world's second-largest economy, a survey published Monday said.

The HSBC/Markit purchasing managers' index (PMI) for China's manufacturing sector in April stood at 48.9, lower than the market forecast of 49.4 and the preliminary reading of 49.2.

A reading above 50 indicates expansion, while anything below that represents contraction.

The overall new orders index for the month slipped to 48.7, the lowest in a year, signalling reduced business at Chinese manufacturers for the second consecutive month.

However, new export orders index increased in April, suggesting improved demand in international markets.

The PMI data indicate weaker domestic demand and increased downward pressure on the economy, said HSBC chief China economist Qu Hongbin, adding that further stimulus measures are required to stabilize growth.

The HSBC China manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in more than 420 manufacturing companies.

An official survey, which focused more on medium and larger-sized companies, showed China's manufacturing PMI stood at 50.1 in April, unchanged from March.

The Chinese economy expanded 7 percent year on year in the first quarter of 2015, the lowest quarterly growth rate since 2009.

Growth is expected to slow further to 6.8 percent in the second quarter, the State Information Center, a government think tank, said in a research report published on Monday.

The country's top leadership vowed to step up targeted adjustment measures and timely pre-tuning and fine-tuning policies to ensure growth stays within a proper range, according to a statement released on Thursday after a meeting of the Political Bureau of the Communist Party of China Central Committee.

To stabilize growth, the central bank has cut benchmark interest rates twice since November and lowered banks' reserve requirement ratio.