China’s manufacturing contracts, signaling recovery concerns

China's factory activity declined in April, an official survey showed Sunday, signaling policymakers’ challenges in sustaining momentum in the country’s economic recovery.

According to the government statistics bureau and an official industry group, a monthly purchasing managers’ index declined to 49.2 from March's 51.9 on a 100-point scale where numbers below 50 indicate activity contracting.

Measures of production, new orders and employment dropped from the previous month, the National Bureau of Statistics and the China Federation of Logistics & Purchasing said. But they said the index for production remained above 50, meaning that there was still an expansion.

China’s economic growth accelerated in the first quarter of this year after the abrupt end of anti-virus controls. But authorities cautioned that the country will likely face import and export pressures in the coming months amid an uncertain global economic outlook, and warned of inadequate domestic market demand in the world’s No. 2 economy.

The bureau’s senior statistician, Zhao Qinghe, said Sunday the decline in the manufacturing purchasing managers’ index was partly caused by inadequate market demand and the relatively high base figure recorded in the first quarter when recovery was fast.

Official data also showed the index measuring non-manufacturing commercial activities edged down to 56.4 from 58.2 in March. The composite PMI dropped to 54.4 from 57 last month.

Earlier this year, China’s government set this year’s economic growth target at “around 5%,” a conservative target that will only be met if GDP grows faster in the months ahead.

The government earlier said authorities will implement various policies to “stabilize growth” and stimulate domestic demand, as well as help support the development of emerging industries.