A Chinese manufacturing index rose less than analysts forecast in September, unexpectedly weakening from a preliminary estimate in a result that casts doubt on the strength of the economy’s rebound.
The Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics rose to 50.2 in September from 50.1 in August. The final number was less than last week’s 51.2 preliminary reading and the 51.2 median estimate in a Bloomberg News survey. A similar gauge from the government is due tomorrow.
Premier Li Keqiang is trying to protect a targeted 7.5 percent expansion for 2013 as the Communist Party prepares for a meeting in November to set economic policy for coming years. A Shanghai free-trade zone inaugurated yesterday, tax breaks and increased railway investment reflect policy makers’ efforts to restructure the economy, support growth and limit stimulus.
“It is possible that activities weakened in the last 10 days of the month,” said Wang Tao, a Hong Kong-based economist for UBS AG, commenting on the gap between the preliminary and final readings. “This also brings focus on the release of the official PMI tomorrow.”
Momentum “seems to have been wobbly this month” and August and September may mark this year’s peak for growth in industrial production, Wang said.
Li said that China’s economy is stabilizing and the nation can meet its main economic targets, in remarks today at a National Day celebration, state radio reported.
The gap between the initial and final readings for the manufacturing index was the biggest since publication of the preliminary or “flash” reading began in 2011. In a phone interview, Chris Williamson, chief economist at Markit Economics in London, said he couldn’t explain the difference; “it’s just one of those things.”
The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong fell 1.7 percent, the biggest decline in a month.
“We expect continuous policy efforts to sustain the recovery,” Qu Hongbin, HSBC’s chief China economist in Hong Kong, said in a statement. “Growth is bottoming out.”
The HSBC report is based on responses from purchasing managers at more than 420 businesses. The government increased the number of companies in its manufacturing survey to 3,000 from 820, starting from January’s reading.
Today’s reading in the HSBC index was the highest in five months and the second straight month above 50. The mixed picture from the survey included signs that manufacturing output grew at a slower pace in September than August, while export orders rose for the first time in six months.
China’s economy probably grew 7.7 percent in the third quarter, according to the median forecast in a Bloomberg News survey this month, up from an estimate of 7.5 percent in August. Growth cooled in the first and second quarters.
China’s State Council says the free-trade zone will allow trials of yuan convertibility in capital flows. At a briefing yesterday, the zone’s executive deputy director, Dai Haibo, detailed plans including the establishment of an international energy center to trade crude futures.
Citigroup Inc. and Bank of China Ltd. are among companies that will participate in the zone as the government tests relaxing some financial and investment controls.