Manufacturing growth in China and other Asian economies slowed in May, the Wall Street Journal reported. Beijing’s official purchasing managers index (PMI) fell to 53.9 in May from 55.7 in April as credit tightening policies appeared to take hold. A similar index produced by HSBC also showed a slowdown in growth, from 52.7 down from 55.2 in April. Manufacturing growth in Australia, Taiwan and South Korea also slowed, although India managed to post the highest increase in 27 months. The results have provoked concerns that the global economic recovery remains weak, and had a negative impact in the Chinese markets and on currencies such as the euro and the Australian dollar. HSBC economic Qu Hongbin said in a research note that private consumption and infrastructure investment in China remain strong, reducing the risk of a double-dip slowdown in China. Frederic Neumann, senior Asian economist at HSB, pointed out that inventories are still lean, and therefore any increase in demand will quickly feed back into production growth.
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