Oil and coal costs blamed for PMI drop

The World Bank estimates China's economy will expand 9.8 percent in 2008, down from 11.9 percent in 2007 and 10.6 percent in the first quarter.
This is mainly due to rising oil and coal costs, which have helped to halve industrial companies' profit growth in the first five months and fuel shortages have also been a drag on manufacturing. Fuel costs are one of the main reasons cited for causing China's PMI to slow for the first time in years. (see story: )

China raised state-controlled retail fuel prices on June 20 to help oil processors cut losses and encourage them to increase supplies. Soaring oil prices had led to refinery closures, queues at petrol stations and rationing in some regions, the National Development and Reform Commission said.