CHINA: Purchasing managers' index

CHINA'S manufacturing activity contracted in May for the first time in seven months, according to data from Markit and HSBC, a bank. Meanwhile spending declined in the three other BRIC economies. This is a worrying sign for the rest of the world: the BRICs accounted for around 60% of worldwide economic growth last year. China’s factory-sector index fell more than expected to 49.6 (a figure below 50 indicates shrinking output) on HSBC’s poll. Yet the figure touted by the Chinese government was 50.8 for May, up from 50.6 on the previous month. The discrepancy arises from the fact that different groups were questioned. The government’s survey includes state-owned giants, whereas the bank asks smaller, more independent firms. Economists seem to favour the bank’s figures. Both the IMF and the OECD, a rich-country club, cut their forecasts for China’s GDP growth this year to about 7.8%. That still looks healthy compared with the West but may be a cause for concern.