Beijing, May 31 (IANS). Activity in China’s manufacturing sector slowed further in May, according to a survey released on Sunday by China’s National Bureau of Statistics (NBS). The pressure on the industry has increased due to decline in new export orders and rising production costs.
According to the data, the official manufacturing Purchasing Managers’ Index (PMI) fell to 50 in May from 50.3 in April, a three-month low. The 50-point level in the PMI is considered the boundary between growth and decline.
According to the data, production increased during this period, but demand further weakened. The manufacturing PMI survey recorded a production sub-index of 51.2 and a new orders sub-index of 49.9.
New export orders fell to 48.6 from 50.3 in May due to the ongoing conflict in West Asia and global uncertainties.
These figures have further increased the concerns of the Chinese government. The government is already facing the challenge of increasing imbalance between supply and demand. China’s economy has long been highly dependent on exports, but exports are no longer supporting economic growth at the same pace as before.
On the other hand, many countries are also taking steps to stop the flood of cheap Chinese products, as this is negatively impacting their domestic industries, economic growth and employment.
According to a report by the South China Morning Post, key member states of the European Union (EU) are working towards imposing tougher measures to stop the flood of cheap products coming from countries that have “industrial over-capacity”, such as China.
A document signed by Spain, Italy, the Netherlands, France and Lithuania, days before a key debate on China in Brussels, said the EU should respond more aggressively against “systemic and structural industrial overcapacity”, the report said. These terms are often used in the context of China.
The initiative comes at a time when the European Commission is set to hold a special discussion on China policy on Friday, aimed at formulating a new strategy amid concerns raised by governments and industries over rising competition from China.
The document, which has not yet been made public and was first reported by the Financial Times, calls for the EU to make more aggressive use of safeguards to address region-specific disruptions. It advocates adopting a broader approach than current product-based anti-dumping cases.
Under these safeguards, duties (tariffs) or import quotas can be imposed in cases where a sharp increase in imports is causing injury to local industry.
These measures have had limited use in the past. These were resorted to specifically to control the increase in imports of products like steel and ferroalloys from China. Ferroalloys are important products used in the steel industry.
–IANS
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