HSBC says Chinas manufacturing growth has slowed down

HSBCBritish banking giant HSBC have said China's manufacturing activity expanded at its slowest rate in three months in December.

The bank's preliminary purchasing managers' index (PMI) for the world's second-largest economy came in at 50.5 for the month, diminished from a final reading of 50.8 in November and the lowest since September.

China's economic growth dropped to a two-decade low of 7.5 percent in the three months ending in June before rebounding by 7.8 percent in the latest quarter.

The index keeps the track of manufacturing activity in China's factories and workshops and is a narrowly watched gauge of the health of the economy. A reading above 50 indicates growth, whereas anything lower than that signals contraction.

While the survey found that growth slowed marginally from November, Qu Hongbin, HSBC economist said, "it still stands above the average reading for the third quarter, implying that the recovering trend of the manufacturing sector starting from July still holds up." He also added that he expected China's economic growth to stabilize at about 7.8 percent in the fourth quarter.

The survey said, new orders grew at a faster rate as compared to the month before though employment reduced and production growth slowed. The survey is based on 85-90 percent of responses from 420 manufacturing companies in mainland China. The full version of the survey will be released early January next year.