CHINA'S manufacturing activity is slowing to almost a standstill in February mainly because of a long Spring Festival holiday, rather than a weakening in recovery, two surveys showed this morning.
The official Purchasing Managers' Index, a comprehensive gauge of China's industrial vitality slanted toward state-owned enterprises, fell to 50.1 last month from January's 50.4, according to the China Federation of Logistics and Purchasing.
A reading above 50 means expansion. It was the fifth month in a row that the index stood above that threshold.
"The retreat is mainly due to the long Spring Festival holiday that resulted in fewer working days," the federation said in a statement. "China's economy is expanding steadily and we are optimistic about the future growth."
Zhang Liqun, an analyst for the federation, said the country's economic recovery is stabilizing.
"Although business expectation continues to rise, people should be aware of a fall in new orders and the risk of decreasing demand," Zhang said.
The component new orders index dropped 1.5 points from a month earlier to 50.1 in February, while the input prices index lost 1.7 points to 55.5.
Meanwhile, the HSBC Purchasing Managers Index, which is slanted toward private and export-oriented companies, also fell to 50.4 in February, from a two-year high of 52.3 in January.
Qu Hongbin, chief economist for China at HSBC, said the readings are in line with a mild recovery in China, and there is no need for the country's central bank to tighten policy any time soon because it may threaten the pace of recovery.
China's gross domestic product growth accelerated to 7.9 percent in the last quarter of 2012, ending a seven-quarter slowdown after the government adjusted its monetary policy and fast-tracked some big investment projects.
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