(menafn – ecpulse)
China's manufacturing index shows a huge contraction in February, which is increasing the odds for Premier Wen Jiabao to add measures to sustain growth even as he extends a campaign to cool the property prices.
As, the PMI preliminary estimates from HSBC Holdings Plc and Markit Economics today recorded 48.1 reading, which is the lowest since November and compares with a final 49.6 in February.
Additionally, some economists predict that the current circumstances significantly increase the odds of an interest-rate reduction, also economists expect a system-wide reserve-requirement ratio cut this month or in early April following China’s decision yesterday to boost rural credit by cutting ratios for more branches of Agricultural Bank of China Ltd., the nation’s third-biggest lender by market value.
As, China’s economy may bottom in the first to second quarter and the country has already passed through the tightest credit conditions in this cycle.
Also, the nation's growth could slow down further amid a sluggish combination in the exports' new orders and softening domestic demand, which calls for further easing steps. . Although this outcome may call for further easing steps, it confirms growth is slowing, lowering the outlook for exporters.
Moreover, February's home prices recorded the worst performance in a year. Almost half of the cities monitored by the government reported a drop in prices from a year earlier, as the country maintained curbs on the property market.
As, the nation's new home prices fell in 27 of 70 cities last month from a year earlier and were unchanged in six cities according to the bureau of statistics, as the Bureau of Statistics said that this is the worst since the government began releasing individual data for 70 cities instead of a national average in 2011.
Asian stocks pared gains and oil and copper fell as the report added to concerns about a deeper slowdown in the world’s second-biggest economy. Wen this month pledged pre-emptive fine- tuning of fiscal and monetary policies to support growth after increases in gross domestic product slowed in 2011.
Finally, the MSCI Asia Pacific Index of stocks was up 0.4 percent at 11:45 a.m. Tokyo time after climbing as much as 0.8 percent. The Shanghai Composite Index extended losses, dropping 0.4 percent at 11:15 a.m. local time.