BEIJING • China’s official factory gauge fell this month, with new orders and prices leading the decline, as officials increasingly prioritise a campaign to clamp down on polluting industries and rein in debt.
The manufacturing purchasing managers’ index (PMI) fell to 51.6 in October, versus 52 forecast in Bloomberg survey, and five-year high of 52.4 in September. The non-manufacturing PMI stood at 54.3 versus 55.4 in previous month. Numbers higher than 50 indicate improving conditions; readings below 50 signal a worsening outlook
With the economy transitioning away from a grow-that-all-costs model, officials are prioritising the environment and a push to tame credit growth. Still, China is poised for its first full-year growth acceleration, defying predictions of a sharper slowdown triggered by the leverage campaign and property risks.
“The data suggest growth remains on track to hit the government’s “6.5% or above” target for this year,” Bloomberg Intelligence economist Fielding Chen wrote in a note. “Continued, if slightly milder, growth momentum would provide leeway for the government to push ahead with its deleveraging agenda,” Chen wrote.
The lower PMIs may indicate a moderation this quarter, Betty Wang, Hong Kong-based senior economist at Australia & New Zealand Banking Group Ltd, wrote in a note. “But it is unlikely to change the broad picture of steady growth in 2017.” — Bloomberg