A latest survey released on Friday by HSBC Purchasing Managers Index showed that manufacturing sector of China slowed in the last month of 2011 for a second month due to weak global demand amid sluggish US economy and European debt crisis.

The latest HSBC report added the growing indications of tension on the world second largest economy’s manufacturers and exporters. The final HSBC Purchasing Managers Index for December 2011 rose 48.7 on a 100-point scale as compared with a reading of 47.7 in November. The report showed that the Chinese companies reported a plummet in foreign orders due to sluggish global demand.

In a statement, Hongbin Qu an economist of HSBC said that the weakening external demand is starting to bite and the latest data will add to pressure on China to relieve spending and lending controls to become stable growth and encourage job creation.

Qu added that hard landings should avoid so long as lessening measures filter through in the future months.

In the month of November, the export growth of China declined for a third month, falling from the 15.9% in October to 13.8%.

Economists said that the fall in international demand has battered export-driven southern coastal states, where a number of small companies have driven out of business and the survivors have jobless tens of thousands of workers.

Analysts said that the latest HSBC PMI has been weaker because it more weighted to smaller private companies that have had difficult accessing loans from banks. Although, the government of China has promised to have state banks lend more to assist struggling entrepreneurs but says most of its curbs will remain in place.

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