China’s manufacturing expanded at the slowest pace in six months, largely due to higher interest rates and tighter credit controls which dampened demand, Bloomberg reported. According to the China Federation of Logistics and Purchasing, the purchasing managers’ index (PMI) fell for a third month to 52.2 in February, down from 52.9 in January. “This is a good number, suggesting Beijing’s policy tightening is starting to cool excessive growth and inflation,” said Qu Hongbin, Hong Kong-based economist at HSBC Holdings (HBC.NYSE, HSBA.LSE, 0005.HK, HSB.Euronext). However, the government, “still needs to step up measures to combat inflation in the months ahead,” he added. Data from the first two months of the year are typically distorted by the timing of the week-long Lunar New Year holiday. A PMI reading above 50 signals expansion.