China's economy sends slowdown signals
(Reuters)
Updated: 2005-08-02 06:55

Two manufacturing reports reinforce views that expansion will continue, but at a slower pace, Reuters reported.

A pair of reports on Chinese manufacturing issued Monday reinforced views that the country's economy is gradually cooling.

Hong Kong-based brokerage CLSA said its purchasing managers' index for China rose to 51.5 in July from 51.0 in June.

The increase, the first in four months, signaled a slightly stronger rate of improvement in China's manufacturing sector, but it was still the third-weakest reading since the index was launched in April 2004.

An index based on a separate survey of purchasing managers conducted for the National Bureau of Statistics painted a less rosy picture. The index fell for the fourth straight month in July, to 51.1 from 51.7 in June.

However, both indexes remained above the 50 mark, indicating manufacturing expansion; a reading below 50 shows contraction.

"Overall, we expect the upcoming growth moderation in the Chinese economy to be a gradual one," Grace Ng of J.P. Morgan in Hong Kong said in a note to clients.