Factory Activity in China May Be Reviving

Manufacturing in China remains sluggish, although the malaise may be ending, according to two purchasing indexes that track such activity.

Last week's index from the state-sanctioned China Federation of Logistics and Purchasing described factory activity unchanged at 50.4 from March to April. The index, which focuses on the country's largest state companies, rates manufacturing on a 100-point scale, with any number above 50 indicating expansion.

This week's HSBC Manufacturing Purchasing Managers' Index rose to 48.1 in April from 48.0 in March. HSBC says its measure indicates domestic demand for manufactured goods contracted at a slower pace but remained sluggish. The multinational bank's index shows activity primarily for smaller, privately held companies.

China's overall economic growth slowed to 7.4% in the first quarter compared with the same period in 2013. The central government is trying to move China's economy to growth based more on domestic consumption and less on exports and investments.

Economists say the government appears willing to accept slower growth in return for achieving a rebalanced economy capable of sustainable growth.