AN early indicator tracking China’s manufacturing sector showed activity contracted in June, indicating worsening conditions after official data for May showed signs of stabilization.

    The Minxin Small and Medium Enterprise (SME) Index dropped to a four-month low of 43.2 in June compared with the previous month’s reading of 45.8.

    Small, private firms continue to suffer in relation to large State firms, the survey showed, with smaller companies having a significantly harder time getting bank loans and other types of financing.

    The Minxin SME Index provides one of the earliest gauges of China’s economy each month, with a specific focus on smaller firms. The data is compiled from a survey of 4,000 private companies, 70 percent of which are small and medium-sized firms.

    The Minxin index is released by the government-affiliated China Academy of New Supply-side Economics and China Minsheng Banking Corporation.

    As with the official PMI, readings above 50 indicate an expansion on a monthly basis, while readings below signal contraction.(SD-Agencies)