China factories feel credit squeeze as expansion slows

China's manufacturers have started to feel the effects of the government's policy to reduce credit-fuelled growth in the country.

China's official purchasing manager's index (PMI) fell to a nine-month low, the latest figures showed.
The PMI, an indicator of conditions in the manufacturing sector, fell to 52 in May from 52.9 in the previous month.
Manufacturing is a key contributor to growth in China's economy.
Even though the figure remained above the threshold level of 50, indicating expansion in the sector, the drop from the previous month shows that expansion is slowing down.
"The continued fall in PMI in May, after the drop in April, shows the rising possibility of a slowdown in economic growth," analyst Zhang Liqun said in the report. More

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