China manufacturing growth slows down

China's manufacturing activity grew at a markedly lower rate in May, official data showed Friday, providing further confirmation that the world's number two economy is slowing rapidly. The official purchasing managers index (PMI) fell to 50.4 from 53.3 in April, the China Federation of Logistics and Purchasing said in a statement. A reading above 50 indicates expansion, while a reading below 50 suggests contraction. While the figure marked the sixth consecutive month of expansion, it was below market expectations. Economists had predicted it would come in at 51.5, according to Dow Jones Newswires. "The rather sharp decline in the May PMI accords with the trend of economic slowdown," Zhang Liqun, an analyst with the federation, said in a statement. An index for new orders also issued by the federation on Friday was down sharply, dipping to 49.8 in May from 54.5 in the previous month. "Based on this, we can expect that enterprises will operate at an even slower rate in the future, and economic growth may continue to decline," Zhang said. China's export-driven economy has begun to slow this year, with growth falling to 8.1 percent in the first quarter from 9.2 percent in 2011, as woes in key export markets such as Europe and the United States hit its overseas sales. Concerns over growth intensified after April data showed industrial production, imports, exports, fixed-asset investment and bank lending all grew at a slower rate than expected. Beijing has lowered the amount of money that banks are required to hold in their coffers, and economists predict more measures to come. British banking giant HSBC last week issued its own PMI index, with its preliminary reading of trends in May, suggesting that manufacturing contracted for the seventh consecutive month as exports deteriorated. HSBC's manufacturing figures typically paint a bleaker picture than China's official numbers. The HSBC survey puts more emphasis on smaller companies, which are suffering more in the economic downturn than state-owned giants.