China factory activity shrinks for fourth month
By Kevin Yao
BEIJING (Reuters) - China's factory activity shrank for the fourth straight month in April, signaling economic weakness into the second quarter, a preliminary survey showed on Wednesday, although the pace of decline eased helped by policy steps to arrest the slowdown.
Analysts see initial signs of stabilization in the economy due to the government's targeted measures to underpin growth, but believe more policy support may be needed as structural reforms put additional pressure on activity.
The HSBC/Markit flash Purchasing Managers Index (PMI) for April rose to 48.3 from March's final reading of 48.0, but was still below the 50 line separating expansion from contraction.
"It's generally in line (with expectations), reflecting that
growth momentum is stabilizing," said Zhou Hao, China economist at ANZ in Shanghai.
Hao expected economic growth to pick up slightly to 7.5 percent in the second quarter.
Annual growth slowed to 7.4 percent in the first quarter from a year earlier, its slowest reading in 18 months, but the pace was just ahead of market expectations and seemed to soothe fears of a sharp downturn.
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