BEIJING, Apr 23 (AFP) : Chinese manufacturing activity improved slightly in April as domestic demand showed "mild improvement", HSBC said Wednesday, but it warned the world's second-largest economy was still showing signs of weakness.
The banking giant's preliminary purchasing managers' index (PMI), which tracks manufacturing activity in China's factories and workshops, rose to 48.3 in April from a final reading of 48.0 in March, the British banking giant said in a statement. The index is a closely watched gauge of the health of the Asian economic powerhouse, a key driver of global growth. A reading below 50 signals contraction while anything above points to growth.
While the figure shows the country's crucial manufacturing sector is still shrinking it is doing so at a slower rate.
"Domestic demand showed mild improvement and deflationary pressures eased," HSBC economist Qu Hongbin said in a statement. "But downside risks to growth are still evident as both new export orders and employment contracted."
However, shares on the benchmark Shanghai Composite Index were 0.49 per cent lower in late morning trade.
Last week Beijing said the economy weakened for the second quarter in a row in January-March, growing 7.4 per cent year-on-year, with leaders blaming slow global recovery and domestic structural reforms.
That marked a sharp drop from 7.7 per cent growth in October-December and 7.8 per cent in the three months before that.
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