Beijing--China's manufacturing activity contracted for the second straight month in February, the government said Sunday, a day after the central bank announced an interest rate cut to help stem a slump in the world's second-largest economy.
The official Purchasing Managers' Index (PMI) released by the National Bureau of Statistics (NBS) came in at 49.9 last month, up a fraction from 49.8 in January, but remaining in contraction.
The index, which tracks activity in factories and workshops, is considered a key indicator of the health of China's economy, a major driver of global growth. A figure above 50 signals expansion, while anything below indicates shrinkage.
January's figure had been the first contraction for 27 months and highlighted weakness in the key sector as China's economic growth slows.
"The manufacturing PMI figure released today reinforces that headwinds remain in the economy," ANZ economists Liu Li-Gang and Zhou Hao wrote in a reaction to the survey.
China's overall economy expanded 7.4 percent in 2014, a 24-year low, with the slowdown prompting authorities to loosen monetary policy in a bid to put a floor under growth.
Underscoring concern, the People's Bank of China (PBoC) announced on Saturday that it was lowering benchmark interest rates for the second time in three months.
The central bank lowered its one-year rate for deposits by 25 basis points, or 0.25 percentage point, to 2.5 percent and its one-year lending rate by a similar margin to 5.35 percent.
The move takes effect on Sunday.
AFP
