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China’s official manufacturing PMI hits 3-year low in August

by ChemOrbis Editorial Team -
  • 01/09/2015 (15:14)
According to media reports, China’s official manufacturing purchasing managers index (PMI) posted the lowest reading seen in three years, declining to a reading of 49.7 in August. The August PMI also fell below analysts’ expectations, which called for a reading of 49.8. Any reading above 50 indicates an expansion while any reading below 50 represents a contraction. The weakness in manufacturing was attributed to factory shutdowns stemming from efforts to limit air pollution.

Weak domestic and external demand as well as a slowing real estate sector has slowed momentum in the world’s fastest growing economy. In July, China’s exports slumped 8.3% while imports also fell 8.1%, declining for nine consecutive months due to ongoing weakness in domestic demand.

Since November 2014, the government has cut the main interest rates five times, offered tax breaks for businesses and accelerated approvals for infrastructure projects in efforts to stimulate the economy. The central bank also devalued the yuan by 2% they injected around $23.5 billion into the economy recently.

In 2015, the Chinese government targets economic grow of around 7%, which would be the worst growth rate seen in more than two decades.
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