China manufacturing at 9-month low in June

China\'s manufacturing activity shrank again in June, HSBC said on Thursday, hitting a nine-month low and adding to concerns about the strength of the world\'s second biggest economy. The British banking giant said its preliminary purchasing managers\' index (PMI) came in at 48.3, worse than May\'s final reading of 49.2 and its lowest since September. A reading below 50 indicates contraction, while anything above signals expansion. The index tracks manufacturing activity in China\'s factories and workshops and is a closely watched barometer of the health of the economy. \"Manufacturing sectors are weighed down by deteriorating external demand, moderating domestic demand and rising destocking pressures,\" Qu Hongbin, HSBC\'s chief economist for China, said in the release. HSBC said it will release the final reading for the month on July 1. The data follows another batch of weak economic indicators in May that showed industrial output, fixed asset investment -- a key measure of government spending -- and exports and imports all weakened. Zhang Zhiwei, economist at Nomura International in Hong Kong, said in a report that \"the fall reinforces our concerns over the downside risks to the economy\". Economists have grown fearful over the outlook for China\'s economy, which grew 7.8 percent in 2012, its worst performance in 13 years, owing to slack demand for exports in the United States and debt-riddled Europe. The first three months of the year saw expansion of just 7.7 percent, disappointing analysts who had expected growth to accelerate in 2013 after showing strength at the end of last year. The government has set a growth target for 2013 of 7.5 percent, the same as last year\'s, as it looks to retool its economic model from exports to domestic consumption. \"Beijing prefers to use reforms rather than stimulus to sustain growth,\" HSBC\'s Qu said. \"While reforms can boost long-term growth prospects, they will have a limited impact in the short term,\" he said, adding economic growth for the second quarter should weaken slightly. China is due to announce gross domestic product figures for the three months to the end of June later this month. The Chinese government\'s PMI survey for June is due out June 1. The result for May showed a rebound to 50.8 from 50.6 the month before, a more positive reading than the HSBC survey for that month. Retail sales, China\'s main gauge of consumer spending, managed a marginal acceleration in on-year growth in May and bucking the trend of other deceleration in other key indicators. However, Nomura\'s Zhang added that despite weakness in key indicators such as industrial production and fixed asset investment, they \"are not collapsing\". \"We believe the government is committed to tolerating short-term pain to achieve its policy objectives -- containing financial risks and secure sustainable growth in the long term,\" he said.