China in­dices at high­est in two years

The Myanmar Times - - International Business -

FAC­TORY ac­tiv­ity in China ex­panded at its fastest pace in more than two years last month, of­fi­cial and pri­vate mea­sures both showed yes­ter­day, bod­ing well for the world’s sec­ond-largest econ­omy.

In­vestors closely watch the pur­chas­ing man­agers’ in­dex (PMI) num­bers, which gauge con­di­tions at Chi­nese fac­to­ries and mines, as the first in­di­ca­tors of the health of the econ­omy each month.

The of­fi­cial PMI came in at 51.2 for Oc­to­ber, its high­est since July 2014, fig­ures from the Na­tional Bureau of Sta­tis­tics (NBS) showed.

That was up from Septem­ber’s 50.4 and was well ahead of the me­dian fore­cast of 50.3 in a Bloomberg News sur­vey of economists.

A fig­ure above 50 sig­nals ex­pand­ing ac­tiv­ity, while any­thing be­low demon­strates shrink­age.

“Pro­duc­tion and mar­ket de­mand is pick­ing up again, ac­cel­er­at­ing ex­pan­sion,” NBS an­a­lyst Zhao Qinghe said in a state­ment.

But Mr Zhao added that down­ward pres­sures re­main on im­ports and ex­ports ow­ing to the slug­gish re­cov­ery in global growth.

The Caixin Pur­chas­ing Man­agers’ In­dex, which fo­cuses on small com­pa­nies, pointed to a sim­i­lar trend.

Its Oc­to­ber read­ing climbed to 51.2, up from 50.1 the pre­vi­ous month and also the high­est since July 2014.

“The econ­omy seems to be sta­bil­is­ing for the mo­ment, ow­ing pri­mar­ily to poli­cies im­ple­mented to sus­tain growth,” Caixin an­a­lyst Zhong Zheng­sheng said.

But Mr Zhong said, “Sup­port­ive poli­cies must be con­tin­ued, or in­dus­trial out­put may be dragged down by a slow­down in in­vest­ment.”

The key man­u­fac­tur­ing sec­tor has been strug­gling for months in the face of sag­ging world de­mand for Chi­nese prod­ucts and ex­cess in­dus­trial ca­pac­ity left over from the coun­try’s in­fra­struc­ture boom.

“This might be as good as it gets,” HSBC Hold­ings eco­nomic re­searcher Fred­eric Neu­mann told Bloomberg.

“A gen­er­ous stim­u­lus in­jected ear­lier this year is still wind­ing it­self through the econ­omy,” he added.

Bei­jing has said it wants to re­ori­ent the econ­omy away from re­ly­ing on debt-fu­elled in­vest­ment to boost growth and to­ward a con­sumer­driven model, but the tran­si­tion has proven chal­leng­ing. –

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