BEIJING, April 23 (Reuters) - Growth in China's vast
factory sector dipped in April as new export orders shrank, a preliminary
survey of factory managers showed on Tuesday, suggesting the world's
second-largest still faces formidable global headwinds into the second quarter.
The flash HSBC Purchasing Managers' Index for April fell to
50.5 in April from 51.6 in March but was still stronger than February's reading
of 50.4.
A sub-index measuring new export orders fell to 48.6 in
April from 50.5 in March, reflecting weaker global demand as the U.S. economic
recovery remains fragile and the euro zone is mired in recession.
The latest PMI data may overshadow China's recovery in the
second quarter after growth unexpectedly slowed to 7.7 percent in the first
quarter from 7.9 percent in the previous three months.
Still, the HSBC PMI has been above the 50-point level
demarcating growth from contraction from the previous month since November
2012, though its failure to break above 53 indicates that the economic
expansion it signals is only moderate.
"New export orders contracted after a temporary
rebound in March, suggesting external demand for China's exporters remains
weak," said HSBC's China chief economist Qu Hongbin.
"Beijing is expected to respond strongly to sustain
the economic recovery by increasing efforts to boost domestic investment and
consumption in the coming months.”
The International Monetary Fund on Tuesday cut its 2013
forecast for global growth to 3.3 percent, down from its January projection of
3.5 percent.
Sub-indexes measuring both input and output prices fell in
April, indicating overcapacity upstream and soft demand, according to the Flash
PMI survey.
An employment sub-index also dipped as factory activity
cooled, although China's job market is holding up relatively well despite
slower growth.
TEPID RECOVERY
The latest Reuters poll showed China's economic growth
could pick up in the second quarter as the government boosts infrastructure
spending.
Analysts in the poll expected full-year economic growth to
pick up slightly to 8.0 percent in 2013 from 7.8 percent last year, its weakest
rate since 1999.
The government is expected to step up infrastructure
investment to cushion the economy against global headwinds, but a big stimulus
package looks unlikely as Beijing plans to deepen reforms to put growth on a
more sustainable long-term footing.
On Tuesday the China Daily newspaper quoted a researcher
from the Ministry of Finance as saying that stimulus on the scale of that in
2008 was not necessary, as the economy is on an overall stable trend.
China has set a 7.5 percent GDP growth target for 2013, a
level Beijing deems sufficient for job creation while providing room to deliver
structural adjustment.
The Q1 slowdown, which came despite a credit boom,
suggesting the cash sloshing around the economy is not having the desired
effect of stoking growth and could instead exacerbate property and inflationary
risks.
The final HSBC manufacturing PMI is scheduled to be
published on May 2, a day after the official PMI.