Another evidence of slower growth in the global economy in the second half of this year came from China after it became clear today that the manufacturing sector of the country has shrunk for the first time in 17 months in July. Data for China’s manufacturing sector are important for global financial markets because the country’s third largest economy in the world and one of the biggest consumers of raw materials. Index of HSBC, which monitors business activity in the factory sector, China dropped to 49.4 points in July from 50.4 points the month before. Its value thus fell into the pessimistic zone below 50 points for the first time since April 2009, says CNN. Separate data on China Federation of Logistics and purchases (CFLP) on the weekend showed that the official index of the Chinese government for business activity in the manufacturing sector fell to 51.2 points in July from 52.1 points the month before. That is its lowest level, also from April 2009 onwards. Most clearly for the contraction in the sector said the drop in the volume of new orders. Contraction in production in China may worsen the economic mindset of investors, especially since the U.S. government announced late last week that the U.S. economy has slowed more than expected to 2.4 percent pace its growth in the second quarter.
China led the world economy to recover in 2009, during the second quarter gross domestic product (GDP) of the country increased by 10,3 percent. However, this was significantly less than reported in the first quarter growth of 11.9 per cent. According to the Chinese Government’s economy has surpassed that of Japan in size. Estimates of Analysts for the Chinese economy are contradictory, according to some it grows too fast, which can lead to excessive appreciation of some assets as securities and real estate. But others fear more of the measures the Chinese government to curb bank lending and investment in real estate.