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China manufacturing growth slows in February

PMI index above the 50 mark for the fifth consecutive month

The Chinese official Purchasing Managers Index (PMI) dipped to 50.1 in February from 50.4 in January primarily due to the impact of the government’s policies in the recent times.

A PMI of above 50 indicates an expansion in industrial activity, and below hints at contraction.

The output index declined to 50.2 in February from 50.3 in January, while the new orders index fell to 50.1 from 51.6 a month earlier.

Liu Ligang, an economist with ANZ, told the Financial Times (FT): “The recovery remains fragile and could falter as monetary policy conditions are tightened.”

Louis Kuijs, an economist at Royal Bank of Scotland, told FT: “The balance of consideration in the macro [economic] stance is shifting. We do expect the government to contain the overall credit expansion.”

A separate PMI, published by HSBC, showed that the country’s manufacturing PMI fell to 50.4 in February from 52.3 in January.

The country’s Lunar New Year holiday this year took place in February, while it happened in January last year. Economists, however, say that the holiday factor has less impact on the manufacturing activity.

In January, the People's Bank of China has withdrawn cash of $146bn (Rmb910bn) from the economy to neutralize an increase in financing by the country’s financial firms.

China’s economy recovered in the fourth quarter of 2012 due to rise in lending and government spending.

The PMI is a survey that measures sentiment rather than actual activity.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.