China May manufacturing PMI edges up to 50.2, meets forecasts

BEIJING (Reuters) - Activity in China's giant factory sector expanded slightly in May, as expected, an official survey showed on Monday, offering investors some relief but not enough to arrest worries about a persistent economic slowdown.

The official manufacturing Purchasing Managers' Index (PMI) edged up to 50.2 from April's 50.1, the National Bureau of Statistics said on its website, in line with analysts' forecast for a 50.2 reading.

A reading above 50 points indicates growth on a monthly basis, while one below that points to contraction.

Weighed down by a property downturn, factory overcapacity and high levels of local debt, China's economic growth is expected to slow to a quarter-century low of around 7 percent this year from 7.4 percent in 2014.

In a bid to spur growth and reduce borrowing costs, the central bank already has delivered three interest rate cuts since November, lowering the benchmark lending rate by 90 basis points, and cut bank reserve ratio by 150 bps this year.

(Reporting by Koh Gui Qing; Editing by Kim Coghill)