SHANGHAI (AP) — China's manufacturing boom slowed further in February as authorities tightenedcontrols on credit to cool inflation and factories eased output, especially of food and textiles.
The state-affiliated China Federation of Logistics and Purchasing said Tuesday that its purchasingmanagers index, or PMI, dipped to 52.2 last month, from 52.9 in January and 53.9 in December.
Despite declining for three months, the reading has remained above 50, the benchmark for expansion, fortwo straight years.
A second, competing survey, the HSBC China Manufacturing Purchasing Managers Index, fell to a seven-month low of 51.7 in February from 54.5 in January.
The reading "confirms that the growth of China's manufacturing sector is cooling a little," Qu Hongbin,chief economist for China at HSBC, said in a statement.
"This is a positive development as slower growth is helpful to check inflation, while concerns about aslump in growth are unwarranted," he said.
The HSBC survey covers 400 companies, while the federation's monthly reports measure data from 820 companies across a range of industries and is an indicator of future trends.
Consumer inflation rate rose to 4.9 percent in January from 4.6 percent the month before, driven by a 10.3percent jump in food prices, despite repeated moves to tighten credit. Inflation hit a 28-month high inNovember, though analysts expect price pressures to continue in the coming months.
Purchasing, inventories of both finished goods and materials and production all showed a relatively largedecline, while new orders, export orders, imports and purchasing prices were moderately strong, thepurchasing manager's survey showed. It said production slowed in most sectors, though there was a rebound in steel output despite the weeklong Lunar New Year holiday.
With materials prices surging, manufacturing of food and farm-related products and of textiles slowed, the report said.
"Pressure from inflation is very strong, especially in ... areas affected by a severe drought. This could give rise to speculative price increases for grain crops," the report said. Surging crude oil prices and loose U.S.credit policies are also adding to China's inflation troubles, it said.
