China's?manufacturing expanded in June at the slowest pace in almost three years as growth in export orders weakened for the third month, a survey of purchasing managers showed.
The Purchasing Managers' Index fell to 52 from 53.3 in May, the China Federation of Logistics and Purchasing said yesterday in an e-mailed statement. That's the lowest since August 2005, Bloomberg News reported.
A global economic slowdown triggered by the United States housing slump may be exacerbated by increased borrowing costs as central banks tackle rising inflation. China's growth will drop below 10 percent this year for the first time since 2002, the World Bank forecasts.
"Manufacturing growth will continue to weaken, in line with the economy as a whole," said Sun Mingchun, an economist with Lehman Brothers Holdings Inc in Hong Kong.
The index of new export orders declined to 50.2 from 53.4. A reading above 50 reflects an expansion, below 50 a contraction.
Those for new orders and output also fell, while the input-price index climbed to a record, underscoring the threat to manufacturing from higher costs for labor and raw materials.
In the first five months, 2,331 shoemakers closed in Guangdong Province, the world's largest footwear production center, because of rising wages and gains by the yuan that ate into export profits, the customs bureau said on Monday.
Overseas shipments climbed 22.9 percent in the first five months of this year, less than the 25.7 percent gain for all of 2007, on weaker US demand.
World economic growth will falter by year's end as faster inflation and higher borrowing costs leave people with less money to spend, central bankers said at a meeting of the Bank for International Settlements in Basel, Switzerland, this week.
"There's no reason for optimism about export growth in the second half," Li Ruoyu, an analyst with the State Information Center, a government research institute, said.
The World Bank says China's economy will grow 9.8 percent in 2008, down from 11.9 percent in 2007 and 10.6 percent in the first quarter.
Rising oil and coal costs helped to halve industrial firms' profit growth in the first five months.
(Shanghai Daily July 2, 2008)
