China Feb HSBC PMI at 7-month high but more rate cuts seen likely

Beijing

ACTIVITY in China's factory sector edged up to a seven-month high in February but export orders shrank and deflationary pressures persisted, a private business survey showed, adding to the view that yet more interest rate cuts will be needed.

Chinese policymakers are embarking on their biggest easing campaign since the depths of the global crisis as the world's second-largest economy is weighed down by a cooling property market, high debt levels and excess factory capacity.

The People's Bank of China cut interest rates on Saturday, in the latest effort to support the economy as its momentum slows. The move was its third major policy easing since late November and came just days before the annual meeting of the count…