China was one of the major engine for the global growth after the 2008 crisis. When Chinese economy stumbled in 2008, she responded with a stimulus package which also lifted other economies. Now Chinese economy is slowing down too with signs that current manufacturing slump may match that of 2008 crisis.
China’s manufacturing may shrink for an eighth month in June, matching the streak during the global financial crisis in a signal the government’s stimulus has yet to reverse the economy’s slowdown.
Today’s preliminary reading, called the Flash PMI, is based on 85 percent to 90 percent of responses to a survey of more than 420 companies, according to HSBC. The government releases its own monthly index on July 1. That gauge has shown six straight months of expansion while declining to 50.4 in May from 53.3 in April.
This time, however, the stimulus hasn’t had the desired result as of now.
Today’s report contrasts with comments by officials expressing confidence growth will rebound, with President Hu Jintao saying in remarks published June 17 that China has taken“targeted measures” to boost domestic demand. Asian stocks fell and the yuan weakened for a second day against the dollar.