According to a private report compiled by Markit Economics and HSBC Holdings Plc, Chinese manufacturing is expanding at a faster pace in December than seen in previous months.
The preliminary reading for December’s purchasing managers index was 0.1 higher than predicted by economists participating in a Bloomberg survey.
The 50.9 result was also 0.4 higher than November’s final reading and marks the 2nd time in over a year that the figure has come in above the 50 mark which divides expansion from contraction.
The final figure won’t be released until the end of the month.
December’s Flash result is based on 85-90 per cent of responses received from over 420 companies.
Although it appears that the global economic slowdown is still having a negative effect on overseas shipments and export levels this latest result, when combined with better-than-forecast retail sales and improved factory outlook, indicates that the world’s second largest economy is fighting back and on course to rebound from last quarter’s weak pace of growth.
Nomura Holdings Inc are estimating that in the fourth quarter the economy could expand by 8.4 per cent from a year earlier. If this proves accurate it will be growth of 1.0 per cent more than seen in the third quarter.
The chief China economist with HSBC Hong Kong commented: ‘China’s ongoing growth recovery is gaining momentum mainly driven by domestic demand conditions.’ However, Qu Hongbin went on to assert that the difficult global situation requires ‘Beijing to keep an accommodative policy stance to counter-balance the external weakness, provided inflation stays benign.’
Meanwhile, during an interview for Bloomberg television Ding Shuang, a former employee with the International Monetary Fund, asserted: ‘More broadly, data since September confirms that economic activity is improving and it appears that the cyclical economic upturn is gaining momentum.’
As of 10:20 am
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