The HSBC Manufacturing PMI for China came out at 50.1 for this month, showing a much lower expansion rate than the previous PMI of 51.6. The indicator is China’s earliest indicator of a decrease in the expansion of the country’s industrial activity, indicating an expansion rate which has not been seen as low since last July, almost 1 year ago. In spite of the low figure, the reading still indicates that the industrial sector is expanding as it came out above 50.0.
Recent tightening measures has shown signs of an easing inflation, such measures as continually increasing the bank’s required reserves and the country’s interest rates have heavily affected the amount of money being invested and ensured that inflation was at least being slowed down.
China’s inflation has been on the rise in recent months and had hit a 34 month high in May to reach a level of 5.5%. Analysts expect this level to rise for the months of June and July, some estimating inflation to reach a 6% high.