Xinhua quoted according to a reading of the manufacturing purchasing managers' index released by HSBC that China manufacturing activity in June slowed to the lowest level in seven months continuing to trend below the boom-or-bust level.

According to the HSBC the flash China manufacturing PMI stood at 48.1 in June, compared with 48.4 in May while the sub index of new export orders posted its sharpest decline since March 2009.

Mr Qu Hongbin chief economist at HSBC China and co-head of Asian Economic Research at HSBC said "China's manufacturing sector continued to slow in June, though the pace of decline seems to be easing."

He said that "With external headwinds remaining strong, exports are likely to decelerate in the coming months. The sharp fall of prices and moderation of new orders suggest weak domestic demand, posing destocking pressures for Chinese manufacturers."

Warning all these factors will weigh on China's job market, Mr Qu expected more decisive policy stimulus to reverse the growth slowdown.

HSBC preliminary figure for the Chinese PMI is calculated based on 85 to 90% of the total responses to HSBC's monthly PMI survey and is issued about one week before the final PMI reading.

The National Bureau of Statistics and the China Federation of Logistics and Purchasing will release official PMI data for June on July 1. The official PMI data is based on a survey of purchasing managers in more than 820 companies in 20 industries.

Source - Xinhua

(www.steelguru.com)