China’s manufacturing activity slips to nine-month low in June: HSBC

China’s manufacturing activity slips to nine-month low in June: HSBC China's manufacturing activity slipped to a nine-month low in June this year as demand tumbled further, a first round survey revealed.

The flash HSBC Purchasing Managers' Index drifted further away from the 50-point threshold by slipped to 48.3 in June, from 49.2 in the May. The preliminary reading of 48.3 is the weakest level since September last year.

It may be noted here that a reading of above 50 represents expansion in an economic sector, while a reading of below 50 represents contraction.

Qu Hongbin, HSBC's chief China economist, blamed the combination of deteriorating external demand, slowdown in domestic demand and increasing de-stocking pressures for the declining manufacturing activity in the world's most populous country.

Hongbin added that the country's manufacturing sector would likely report slightly weaker growth in the second quarter.

Commenting on the figures, Hongbin said, "Beijing prefers to use reforms rather than stimulus to sustain growth. they will have a limited impact in the short-term. As such we expect slightly weaker growth in 2Q."

In 2012, China saw its economy growing at its slowest pace in 13 years. As the slowdown is still persistent, economists have cautioned that China could miss its growth target of 7.5 per cent this year.