PMI improves, not out of danger

CHINA'S manufacturing improved slightly in August but remains in contractionary territory for the second time in one year, an HSBC survey showed. A preliminary reading of the HSBC Purchasing Managers' Index, the earliest available indicator of the industrial sector's operating conditions, rebounded to 49.8 from a final reading of 49.3 for July. August's low reading was attributed to tighter monetary policies, higher production costs and sluggish overseas demand. A reading of more than 50 indicates expansion and less than 50 means contraction. QuHongbin, chief economist for China at HSBC, said: "The data suggests that the hard landing risk is still remote. This provides leeway for the People's Bank of China to keep the current tightening measures in place."

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