Business

China's factory activity show further contraction

  • 24 March 2014
  • From the section Business
Factory worker in China
Image caption China wants the economy to move away from manufacturing-led growth and rely more on consumption

China's manufacturing sector showed further contraction in March, according to a new report which mainly tracks activity in smaller factories.

The HSBC Purchasing Managers' Index (PMI) gave a reading of 48.1 for March, compared to 48.5 in February.

A reading below 50 indicates contraction, while one above 50 shows expansion.

The HSBC survey focuses on smaller companies in the private sector.

China's official PMI survey, weighted more towards bigger and state-owned enterprises, will be released later this month.

China's official PMI came in at 50.2 in February - an eight-month low, reinforcing signs of a modest slowdown in the world's second biggest economy.

China's exports also dropped 18% from a year earlier in February, leading to a trade deficit of $23bn (£14bn) for the month.

At China's annual National People's Congress earlier this month, Premier Li Keqiang set a growth target of 7.5% this year - the same rate as last year.

But he added that there was some flexibility on that target for 2014 and that the Chinese government's main concern was jobs.