[advertise]广告[/advertise]March, 2, 2010, Shenzhen Daily, CHINA’S manufacturing grew at a slower pace in February, reducing the risk of overheating in the fastest-growing major economy. A Purchasing Managers’ Index (PMI) released by the government yesterday slid to a one-year low. Another PMI, from HSBC Holdings Plc. and Market Economics, showed the weakest expansion in three months. A weeklong Chinese holiday last month may have affected the numbers. Investors are concerned that China’s economy may lose momentum, undermining the global recovery, as the government reins in stimulus to counter inflation and asset-bubble risks. Premier Wen Jiabao reaffirmed a “moderately loose” monetary stance Saturday ahead of an annual address to lawmakers this Friday where he will outline policy for 2010. “A moderation in Chinese manufacturing growth is actually good news because it helps contain overheating and inflation risks,” said Qu Hongbin, chief China economist at HSBC in Hong Kong. Export gains, consumer spending and credit growth that remains “excessive” could ensure an economic expansion of more than 10 percent in the first quarter from a year earlier, he said. Conflicting evidence The surveys gave conflicting evidence on export orders, with the government’s measure falling to a nine-month low as HSBC’s rose to the highest in almost five years. HSBC’s survey is more heavily weighted toward private businesses. “We were looking for a lower PMI because of the Chinese New Year, which always hits new orders, particularly exports, as well as the beginning of the effects of government policy,” said Stephen Green, an economist at Standard Chartered Plc. in Shanghai. “Across a range of policies — monetary, fiscal and investment — we have seen the government shift position, to take some of the momentum out of the V-shaped recovery.” He said the outlook for the economy was “relatively benign” for 2010 with a sharp slowdown unlikely. Overall, the government’s index fell to a seasonally adjusted 52, the Federation of Logistics and Purchasing said yesterday. That was less than 55.8 in January. HSBC’s PMI declined to 55.8 from 57.4. ‘Really ugly’ Yesterday’s reading in the official survey was the weakest since manufacturing stopped contracting in March last year. Ten industries, including clothing and footwear, reported contractions in export orders versus 10 posting expansions, highlighting the risk that global demand may be weak this year. The number is “really ugly,” said Dariusz Kowalczyk, chief investment strategist at SJS Markets Ltd. in Hong Kong. “The weakness cannot be explained with the Lunar New Year holiday effect and indicates a slowdown in growth momentum as well as easing price pressures, which is likely to limit monetary tightening.” In contrast, Brian Jackson, an emerging-markets strategist at Royal Bank of Canada, said the holiday complicated the data and it was “premature” to say China was losing steam. UBS AG and Bank of America-Merrill Lynch echoed that view. ‘Cautious’ on exports In yesterday’s data, a reading over 50 indicates an expansion. The official survey’s output index slid to 54.3 from 60.5. A measure of orders tumbled to 53.7 from 59.9. An index of export orders fell to 50.3 from 53.2 in January. “The decline in new export orders warrants close attention and we need to be cautious on the outlook for export growth,” Zhang Liqun, a researcher at the State Council Development and Research Center, said in the statement. Exports climbed for a second straight month in January after plummeting because of the financial crisis. Subsidies within China for car and home-appliance purchases and tax rebates for exporters would be continued this year to support growth, the government said. (SD-Agencies)