In April this year, the China HSBC Flash Manufacturing Purchasing Managers Index (PMI) decreased to 49.2, the lowest level in the past 12 months, down from March's final reading of 49.6, as announced by the HSBC on April 23.
In April, HSBC new orders index declined further to a one-year low of 49.2 from March's 49.8, indicating that domestic demand became softer.
According to Hongbin Qu, HSBC's chief economist for China, China's manufacturing has sped up the declining pace due to slack local demand and continuous decreasing input and output prices. He mentioned that China faced the risk of deflation. Meanwhile, China's action of cutting banks' reserve requirement ratio (RRR) need time to see the effectiveness. Mr. Qu advised that China's government to take further loose policy to stimulate economy.