Experts expect further set of measures to achieve China’s 2016 target for GDP growth at 6.5-7% level

Almaty. March 2. Silkroadnews - Experts expect from the country’s leaders new measures to support the economy, the newspaper “Vedomosti” wrote.
As the publication says, according to the National Bureau of Statistics, purchasing managers’ index (PMI) in the manufacturing sector fell to 49 in February from 49.4 points in January (value below level of 50 means a drop in activity, above – a growth). This value is the lowest one since February 2009, the decline has been observing for the seven straight months. According to the Bureau, the negative dynamics is partly due to the seasonal effect: many factories shut down for extended periods to allow workers to travel to distant hometowns to spend time with their families.
The PMI, calculated by the private organizations Caixin Media and Markit, fell even lower – down to 48 points (in January it made 48.4). In their comments Caixin pointed out to the decline in employment.
“During February staff numbers declined at the sharpest rate since January 2009. The companies reducing the number of jobs mainly refer to the staff optimization policy within the framework of cost-cutting initiatives and note they are not looking for employees to replace those who leave voluntarily,” - said the representative of Caixin He Fan.
So far the situation in the services sector used to be much better to compare with production, yet the recent official index showed a slowdown here as well: PMI dropped from 53.5 to 52.7 points, the lowest level since December 2008.
Many of the analysts were surprised with such poor results.
“While the Chinese new year may have distorted the [manufacturing] PMI figures in January and February, the average level of the two months still remained at 49.2. Today’s data suggest that policymakers will take further measures in the upcoming National People’s Congress starting on 5 March in order to achieve a GDP growth target of 6.5-7% in 2016"- said Raymond Yeung and Louis Lam of ANZ Research.
February data on China follow a global trend, Bill Adams, international economist at PNC Bank says, as business activity in the manufacturing sector of the euro zone, Japan and the United States also declined. He believes that weakness around the world suggested “increased vigilance toward global growth risks may be appropriate in the near term”.
On Monday evening, the People’s Bank of China has cut the reserve requirements for banks by another 0.5 percentage points to 17% (after four earlier declines in 2015) to boost the corporate and consumer lending. Last year China showed the lowest growth rates for a quarter of a century - 6.9%.