China manufacturing growth slows



NEW YORK (CNNMoney.com) -- China's manufacturing sector is still growing, but the pace is starting to slow. That could set off some alarm bells in the financial markets about the state of the global economy.

The government-run China Federation of Logistics and Purchasing reported Sunday that the country's Purchasing Managers Index, or PMI, fell to 51.2 in July from 52.1 a month earlier. A PMI figure above 50 indicates growth in the manufacturing sector, but the July reading was a 17-month low.

The declining pace of manufacturing growth could spook investors, particularly after the United States government reported Friday that the U.S. economy grew at a sluggish 2.4% annualized pace in the second quarter.

A measure of new orders in China also dropped sharply, coming in at 50.9 in July. That was down from 52.1 in June. The fall in new order activity could reflect renewed fears of weakness in the economies of the United States and Europe.

China has been helping to keep the overall global economic recovery on track as the nation, in addition to being a major manufacturer, is increasingly becoming a key market for goods made in the U.S. and Europe.

In the second quarter, China's GDP rose at an impressive pace of 10.3%. A Chinese official said Friday that China's economy now tops Japan's as the world's second-largest.

But the growth in China's economy was down from a rate of 11.9% in the first quarter, as the government has taken steps to try and cool the economy down.

There have been some concerns that China's economy may have been growing too quickly, and that could give rise to asset bubbles, especially in the real estate market.

However, some experts think that China's economy is still on track to report solid growth, even if it is tapering off a bit.

Last week, news agency Market News International said that its China business sentiment survey rose slightly in July.

According to that survey, "concerns on the impact of the eurozone crisis have abated somewhat" and Chinese companies were now seeing the usual increase in demand for goods ahead of the important fourth-quarter holiday season.

Carl Weinberg, chief economist with High Frequency Economics, a research firm based in Valhalla, N.Y., also wrote in a report Sunday that by looking at other indicators of manufacturing activity, such as steel output and demand, it's clear that China is still solidly in expansion mode.

"China's economy is very strong. It is recovering from a small slowdown," Weinberg wrote.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.20%4.27%
15 yr fixed3.27%3.21%
5/1 ARM3.53%3.38%
30 yr refi4.18%4.24%
15 yr refi3.26%3.20%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,131.97 100.83 0.59%
Nasdaq 4,552.76 33.86 0.75%
S&P 500 1,998.98 14.85 0.75%
Treasuries 2.59 -0.00 -0.08%
Data as of 3:56am ET
Company Price Change % Change
Apple Inc 100.86 -0.77 -0.76%
Bank of America Corp... 16.71 -0.03 -0.18%
Yahoo! Inc 42.71 0.16 0.38%
Alcoa Inc 16.16 -0.23 -1.40%
Facebook Inc 76.08 1.50 2.01%
Data as of Sep 16

Sections

Scotland's independence vote is too close to call but those who want to keep Britain united won this year's campaign funding race by some distance. More

The FBI's new facial recognition system lets local police easily identify you. It will one day spot you from your iris, voice and the way you walk. More

Y Combinator president Sam Altman is teaching a startup class at Stanford with Silicon Valley heavy hitters as guest lecturers. Bonus: All the videos will be available for free online. More

Occupy Wall Street offshoot Strike Debt says it has abolished nearly $4 million in private student loan debt for students who attended Everest College, part of Corinthian Colleges. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.