* China official PMI at 50.2 in Feb, vs 50.5 in Jan
* Both new orders and export orders at 8-month lows
* Reinforces signs of slower economic growth in Q1
By Kevin Yao
BEIJING, March 1 Activity in China's factory
sector slowed to an 8-month low in February, a government survey
showed, reinforcing signs of a modest slowdown in the economy as
The official Purchasing Managers' Index edged down to 50.2
in February from January's 50.5, the National Bureau of
Statistics said on Saturday, just ahead of market expectations
A PMI reading above 50 indicates expanding activity while
one below that level points to a contraction.
A preliminary survey released last week by HSBC and Markit
Economics showed that the factory sector activity hit a
seven-month low of 48.3 from 49.5 in January.
The index for new orders dropped below 50 and employment
reached its lowest point since the global financial crisis.
The new orders sub-index in the official PMI China fell to a
8-month low of 50.5 in February from 50.9 in January and the
sub-index for export orders fell to 48.2 last month, also a
8-month low, from 49.3 in January.
"Judging from market demand and production in some
industries, we expect economic growth to remain steady in the
future," said Zhang Liqun, an economist at the Development
Research Centre, which helps compile the PMI.
"We should fully consider possible risk factors and further
improve macroeconomic policy reserves to help consolidate the
steady trend in economy growth," he said.
The official PMI, which is weighted towards large and
state-owned firms, has usually been rosier than the private
survey, which covers more smaller and private companies. The
official PMI has stayed above the 50-point level since October
The China report kicks off a round of monthly reports on the
health of the global manufacturing industry, with similar
surveys from the rest of Asia, Europe and the United States
expected on Monday.
CONCERNS OVER US, CHINA
In recent weeks, investors have been more concerned that the
Chinese and U.S. factory sectors are dragging on global
activity, even as European manufacturers enjoyed a solid start
to the year.
Although both the official and HSBC PMI surveys are
seasonally adjusted, some analysts cautioned against reading too
much into last month's data, given the possible impact from the
long Lunar New Year holiday, which began on Jan. 31 and covered
early February. Many plants and offices shut for extended
periods during the festival.
To smooth out seasonal distortions, the statistics bureau is
scheduled to release combined January-February growth figures on
factory output, fixed-asset investment and retail sales in
Despite signs of firmer global demand, a drive by Chinese
regulators to rein in the shadow banking sector could hurt
investment growth, while Beijing's continuing anti-corruption
campaign could hurt consumption, analysts say.
On Monday, the statistics bureau will release the official
services PMI at 0100 GMT, ahead of the final HSBC/Markit PMI due
out at 0145 PMI.
China's annual economic growth slowed to 7.7 percent in the
fourth quarter from 7.8 percent in the previous quarter, and
economists polled by Reuters expected growth to slow further to
7.6 percent in the first quarter of 2014.
In 2013, China's economy grew 7.7 percent, steady from the
previous year and fractionally above market expectations of 7.6
percent, which would have been the slowest since 1999.
Premier Li Keqiang is widely expected to stick with the 7.5
percent economic target for 2014 at the annual parliament
meeting due to open on March 5.