CHINA'S manufacturing activities rebounded in March, but analysts were worried because the improvement was not as strong as expected.
The official Purchasing Managers' Index, a comprehensive gauge of operational conditions in largely state-owned industrial companies, rose to 50.9 last month from February's 50.1, the China Federation of Logistics and Purchasing said today.
A reading above 50 means expansion and March was the sixth month for the index to be above that level the highest since May of last year.
However, Zhou Hao, an economist at Australia & New Zealand Banking Group, said the figure was lower than market expectation of 51.2, suggesting that the current economic rebound remained fragile.
"The weak PMI numbers, plus the lower-than-expected trade statistics in neighboring economies, indicate that China's March activity and trade data could surprise the market on the downside," Zhou wrote in a comment.
He said China's economy was still likely to grow 8.1 percent year on year in the first quarter, supported mainly by fast investment growth and a rebounding property market. But consumption appeared to have been worse than his expectation, largely owing to falling government expenditure.
The weak data suggested the economy may falter with tightened monetary policy conditions, Zhou said.
A separate index by HSBC Corp, slanted toward private and export-oriented manufacturing companies, posted 51.6 in March from February's 50.4, indicating a "modest" improvement, the HSBC said today.
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