April 23 - HSBC survey shows China's factory activity stabilizing, but BEA Union says expect slow growth for some time. Arnold Gay reports.
China's factories stabilized in April, but not enough to flag a return to expansion. HSBC's Flash PMI rose to 49.1 in April, as output and new business rose, while export orders perked up. The private survey is the earliest indicator of China's industrial activity. BEA Union Investment's Henry Wong, believes the Chinese economy will keep slowing down for some time yet. SOUNDBITE (English) BEA UNION INVESTMENT'S HEAD OF FIXED INCOME, HENRY WONG, SAYING: "It's going to slow down for quite a while; may not be (the) end within one or two years. In fact, nowadays, the global economy is undergoing a deleveraging process, and this process is going to be very long and quite painful. For China, I think that because nowadays, because it has been, it is now the second biggest economy in the world, so the adjustment will be very long." HSBC's manufacturing index has not breached 50 this year, the level that separates expansion from contraction. But April's uptick indicates an acceleration of manufacturing activity compared to the start of the year. Still, Wong expects GDP to dip below eight percent, given Beijing's own target for 7.5 percent growth this year. SOUNDBITE (English) BEA UNION INVESTMENT'S HEAD OF FIXED INCOME, HENRY WONG, SAYING: "I would say this is a very pragmatic projection, so we will stick to below eight percent for our target." China's GDP growth slowed to 8.1 percent in the first quarter, but was above the most bearish investor calls. Official PMI numbers are scheduled to be released next week. Arnold Gay Reuters.