China manufacturing on the rise for second month

BEIJING - Agence France-Presse

AP photo

China’s manufacturing activity grew in November for the second month in a row, official data showed over the weekend, in a further sign of strength in the world’s second-biggest economy after a marked slowdown.

The indications of upward momentum were reinforced by a separate survey by British banking giant HSBC that showed growth for the first time in 13 months.

China’s purchasing managers’ index (PMI) reached 50.6 last month, up from 50.2 in October and 49.8 in September and the highest since hitting 53.3 in April, figures from the National Bureau of Statistics showed.

The PMI is a widely watched barometer of the health of China’s economy, and a reading above 50 indicates expansion while anything below points to contraction.

The improved data eased recent months’ worries of a “hard landing”, said IHS senior China economist Alistair Thornton, though he cautioned that risks remained and reforms were needed for long-term growth.

“The fears surrounding that sharp hard landing have been largely averted,” he said, while also singling out as dangers an unstable property market and the debt crisis in Europe, a key trade partner for China.

The November figure came in below the 50.8 median forecast of 10 economists surveyed by Dow Jones Newswires.

Still, Dow Jones said, the official reading “adds to recent signs of a rebound” and “is likely to further boost market confidence in the Chinese economic outlook for the rest of the year.”

Separately, the HSBC said on November 22 that its preliminary PMI reached 50.4 in November, up from a final 49.5 in October and 47.9 in September.

HSBC was scheduled to release its final November PMI data today. China’s manufacturing sector suffered this year given the broader slump in the economy, which has been hit by weaker demand for Chinese products in the crucial markets of Europe and the United States.