China output and new orders both contract at weaker rates in April

April 23, 2014

HONG KONG – Manufacturing output and new orders in China both contracted at weaker rates in April, with the HSBC Flash China Manufacturing PMI coming in at 48.3 for April (48.0 in March), a two-month high. And the Flash China Manufacturing Output Index at 48.0 (47.2 in March), also a two-month high.

Hongbin Qu, Chief Economist, China & Co- Head of Asian Economic Research at HSBC, said China domestic demand showed mild improvement, and deflationary pressures eased - but downside risks to growth are still evident as both new export orders and employment contracted.

Noting that China‘s State Council released new measures to support growth and employment after the release of Q1 GDP, he suggested that the initial impact will likely be limited, but the move did signal readiness to do more if necessary. “We think more measures may be unveiled in the coming months and the PBoC will keep sufficient liquidity.” www.hsbc.com (ATI).