Business activity in the industry in China fell to a minimum of 2011 – RBC

Photo: REUTERS 2016

index of business activity in the industrial sector in China down to 49 points. The last time this value was recorded in November 2011.

According to official statistics published on 1 March business activity index (PMI) in February this year in China’s industrial sector fell to 49 points, according to Reuters. In January, the figure was 49.4 points.

The last time the index of business activity in the industrial sector in China fell to 49 points in November 2011, the agency said. According to Bloomberg, below this mark China’s PMI manufacturing fell in 2009 alone. Economists surveyed to Reuters, expected the index to fall in February, only to 49.3 points

«This prolonged winter for the Chinese economy”, -. Say economists Bloomberg Intelligence Tom Orlik and Fielding Chen

as noted to Reuters, China’s industrial sector is under pressure from weak demand at home and abroad, and excess production in key industries, making it immune to the support measures by the Central Bank of China, such as lower interest rates. New export orders and total orders continued to decline in February, according to Reuters.

In addition, some manufacturers are struggling with heavy debt burdens, which they increasingly difficult to extinguish because they are constantly forced to cut prices to increase sale, to Reuters notes.

The fact that the PMI index is below 50, indicating a reduction in business activity, if it rises above 50, it speaks of its growth.

Earlier, last week, on February 25, stock index fell more than 6% in China. The index of the Shanghai Stock Exchange Shanghai Composite fell on the session by 6.41%, dropping to 2741.2 points, the index SZSE Component Shenzhen exchanges showed more serious decline, losing 7.41% to the level of 1738.6 points. From the beginning, Shanghai Composite lost 23%.

The analyst VTB24 Stanislav ticks in his review, quotes from which leads RBC argued that the publication of the February PMI may cause a new wave of concern about the state of China’s economy.

«The publication of the February PMI next week is able to provoke a new wave of concern for the current state of the Chinese economy and the passivity of the authorities on giving the latter an additional incentive. The resumption of aggressive selling in the stock market – a harbinger of evil “- he predicted.