China factories struggle, adds to expectations for stimulus

Persistent weakness in China's manufacturing sector reinforced fears of a sharper-than-expected slowdown at the start of 2014, and some government economists think authorities have already started boosting spending to put a floor under growth. On Tuesday two surveys showed that manufacturing struggled in March, with activity at smaller, private firms contracting for a third month, adding to a run of disappointing data that has sparked speculation of imminent government-led stimulus. "We're still in a subdued part of the cycle," said Louis Kuijs, chief China economist at the Royal Bank of Scotland. In March, sources told Reuters the central bank was prepared to loosen monetary policy in order to keep the world's second-biggest economy growing at the government's target rate of 7.5 percent.

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