Chinese Manufacturing Surveys Show Lingering Weakness

Beijing has unleashed stimuli to battle a prolonged slowdown but has little to show for its efforts.

A staff member works in the workshop of an optical fiber and cable manufacturing company in Wuhan in central China's Hubei province. China's factory activity was feeble last month, according to two surveys released Wednesday, June 1, 2016, indicating that official efforts to reverse a downturn in the world's second-biggest economy are struggling.
A staff member works in the workshop of an optical fiber and cable manufacturing company in Wuhan in central China's Hubei province. China's factory activity was feeble last month, according to two surveys released Wednesday, June 1, 2016, indicating that official efforts to reverse a downturn in the world's second-biggest economy are struggling.
Chinatopix via AP

HONG KONG (AP) — China's factory activity was feeble last month, according to two surveys released Wednesday, indicating that official efforts to reverse a downturn in the world's second-biggest economy are struggling.

The country's massive manufacturing sector, which employs many millions of workers, eked out a tiny expansion in May, according to an official index by the Chinese Federation of Logistics & Purchasing, which came in at 50.1, level with April's reading.

The index is based on a survey of factory purchasing managers and uses a 100-point scale on which numbers above 50 indicate expansion and below 50 indicate contraction.

It's the third straight month the index has shown marginal growth.

Beijing has unleashed stimuli to battle a prolonged slowdown but has little to show for its efforts, with growth falling to a seven-year low of 6.7 percent in the first quarter of the year. Its efforts are being hobbled by weak demand from consumers in China and in wealthy export markets, with exports shrinking by 1.8 percent in April, according to figures released last month.

The official data, released by China's national statistics agency, also showed production expanded while new orders grew at a slower rate. But in a sign of weak global demand, new export orders showed no change.

Separately, the private Caixin/Markit survey was more pessimistic, with activity falling to 49.2 in May from 49.4 the previous month.

Total new business fell for the first time in three months while new export orders declined for the sixth straight month, Caixin said.

Growth in China's service industry, meanwhile, held up more firmly, with the federation's index of non-manufacturing companies slipping to 53.1 last month from 53.5 in April.

More in Supply Chain