China's factory activity moderated slightly in May, with the official purchasing managers' index holding at the determining point between contraction and expansion after two straight months of growth, reinforcing analysts' calls for more targeted policy support to shore up domestic demand and sustain growth momentum.
With some countercyclical measures already in place and ample policy space still available, the world's second-largest economy remains well-positioned to consolidate the recovery as midyear approaches, analysts said.
The assessment came as data from the National Bureau of Statistics showed on Sunday that China's PMI for the manufacturing sector in May stood at 50.0 — the threshold between expansion and contraction — despite edging down 0.3 percentage point from April.
According to Wang Qing, chief macroeconomic analyst at Orient Golden Credit Rating International, the marginal pullback was mainly driven by softer market demand during the month.
The subindex for production stood at 51.2 in May, easing 0.3 percentage point from April but remaining above the 50-point mark, while the new orders gauge edged down 0.7 percentage point to 49.9, suggesting some moderation in market demand, the NBS said.
