China's weak factory PMI raises pressure for consumer stimulus
Manufacturing falls to six-month low
Factory gate prices weakest in 14 months
Non-manufacturing accelerates
Consumer stimulus needed as exports slow, analyst says
Recasts, adds analyst comment in paragraphs 6-7, 16, 20, details, context throughout, bullets
By Joe Cash
BEIJING, Aug 31 (Reuters) -China's manufacturing activity sank to a six-month low in August as factory gate prices tumbled and owners struggled for orders, an official survey showed on Saturday, pressuring policymakers to press on with plans to direct more stimulus to households.
The National Bureau of Statistics purchasing managers' index slipped to 49.1 from 49.4 in July, its sixth straight decline and fourth month below the 50 mark separating growth from contraction. It missed the median forecast of 49.5 in a Reuters poll.
After a dismal second quarter, the world's second-largest economy lost momentum further in July, prompting policymakers to signal they were ready to deviate from their playbook of pouring funds into infrastructure projects, instead targeting fresh stimulus at households.
Sentiment remains gloomy among manufacturers as a years-long property crisis keeps domestic demand in the doldrums and Western curbs loom on Chinese exports such as electric vehicles.
Producers reported factory gate prices were their worst in 14 months, plunging to 42 from 46.3 in July, while the new orders and new export orders sub-indices remained firmly in negative territory and manufacturers maintained a hiring halt.
"The fiscal policy stance remains quite restrictive, which may have contributed to the weak economic momentum," said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
"To achieve economic stabilisation, the fiscal policy stance needs to become much more supportive. With the U.S. economy slowing, exports may not be as reliable a source for growth as it was in the first half of the year," he added.
Policy advisers are pondering whether Beijing may decide in October to bring forward part of next year's bond issuance quota if growth does not show signs of bottoming out in the summer.
China made a similar move at the same time last year with stimulus that raised the deficit to 3.8% of GDP from 3.0% and frontloaded part of the 2024 local government debt quotas to invest in flood prevention and other infrastructure.
This time, however, analysts anticipate the authorities will seek to put a floor under depressed domestic demand.
EARLY ENCOURAGING SIGNS
Retail sales topped forecasts last month, apparently vindicating officials' July decision to allocate around 150 billion yuan ($21 billion) China is raising through ultra-long treasury bonds this year towards subsidising a trade-in scheme for consumer goods.
And the August reading of the non-manufacturing PMI, which includes services and construction, quickened to 50.3 from 50.2, allaying fears that it would also enter a period of contraction.
Still, economists are waiting on more specific plans to reinvigorate China's 1.4 billion-strong consumer market beyond a pledge from the top-decision making body of the ruling Communist Party that it will do so.
It will not be easy.
"I'm not actually sure if more (stimulus) can be rolled out," said Xu Tianchen, senior economist at the Economist Intelligence Unit, given the scale of the trade in scheme, which he said "would provide moderate support to the economy" and "seems to be welcomed by consumers".
What is more, any effort to revive domestic demand will likely be ineffective unless further efforts are taken to alleviate a bruising slump in the property sector, which has weighed heavy on consumer spending over the past three years.
With 70% of household wealth held in real estate, which at its peak accounted for a quarter of the economy, consumers have kept their wallets tightly shut.
A Reuters poll on Friday forecast home prices will fall 8.5% in 2024, deeper than the 5.0% decline tipped in a May survey.
"I think officials will settle for something lower than 5% this year," the EIU's Xu said, referring to Beijing's annual growth target.
Reporting by Joe Cash; Editing by Himani Sarkar and William Mallard
免責聲明: XM Group提供線上交易平台的登入和執行服務，允許個人查看和/或使用網站所提供的內容，但不進行任何更改或擴展其服務和訪問權限，並受以下條款與條例約束：（i）條款與條例；（ii）風險提示；（iii）完全免責聲明。網站內部所提供的所有資訊，僅限於一般資訊用途。請注意，我們所有的線上交易平台內容並不構成，也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料，僅適用於教育/資訊類用途，不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議，或是交易價格紀錄，或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容，包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接，皆爲‘按原狀’，並作爲一般市場評論所提供，而非投資建議。請理解和接受，所有被歸類為投資研究範圍的相關内容，並非爲了促進投資研究獨立性，而根據法律要求所編寫，而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊，相關詳情請點擊 這裡查看。
