Chinese manufacturing picks up in March

Shanghai – China’s manufacturing activity rose more than expected in March, official data showed Sunday, but analysts warned the world’s second largest economy was still slowing.

The official purchasing managers index (PMI) rose to 53.1 from 51 in February, helped by an increase in new orders, the China Federation of Logistics and Purchasing said in a statement.

It marked the fourth consecutive month of expansion for manufacturing activity. A reading above 50 indicates industry is expanding, while a reading below 50 suggests it is contracting.

The March figure beat analysts’ median forecast of 50.5, according to Dow Jones Newswires.

Zhang Liqun, a researcher at government think-tank the Development Research Center, said the March reading showed a rebound but he warned overall economic growth was still slowing.

“Future economic growth will still experience a slowdown,” he was quoted as saying in the statement.

Analysts said the rise in March was likely supported by seasonal factors, as manufacturing tends to pick up in spring and following the Chinese Lunar New Year holiday, which fell in January.

China’s economy is widely expected to slow this year as woes in key export markets such as Europe and the United States hit its overseas sales.

Chinese lawmakers last month approved a government-set target for 7.5 percent economic growth this year. China’s economy grew 9.2 percent last year and 10.4 percent in 2010.

The central bank in February cut the amount of cash banks must hold in reserve for the second time in three months as policymakers moved to increase lending and boost domestic consumption amid the economic slowdown.

Beijing has pledged to “fine-tune” policy to prevent a hard landing for the economy, which could trigger widespread job losses and spark social unrest.