China Manufacturing Set to Shrink for Seventh Month as Export Demand Wanes

http://www.bloomberg.com/news/2012-05-24/china-manufacturing-may-shrink-for-seventh-month.html

China’s manufacturing may shrink for a seventh month in May, a private survey showed, reinforcing the need for stimulus as Premier Wen Jiabao accelerates a shift in policy to support growth.

The 48.7 preliminary reading for a purchasing managers’ index released by HSBC Holdings Plc and Markit Economics today compares with a final 49.3 for April. If confirmed on June 1, it would mark the longest run of below-50 readings since the global financial crisis.

Today’s report, along with worse-than-forecast data from Japan and Taiwan yesterday, add to concerns that growth in Asia is in danger as the world grapples with the threat of Greece’s exit from the euro. China will increase the intensity of policy “fine-tuning” amid rising “downside risks” facing the economy, the State Council, or Cabinet, said yesterday.