The Chinese manufacturing sector expanded for the first time in more than a year in November, according to the early reading of a business survey released Thursday, in the latest sign the world’s second-largest economy may, for now at least, have skirted the sharp slowdown that many economists had feared earlier this year.
With export demand reviving and a series of domestic stimulus measures feeding through into the economy, the giant Chinese factory sector is now finally breathing easier: a monthly purchasing managers index published by the British bank HSBC rose from 49.5 in October to 50.4 in November, climbing above the 50 mark that separates expansion from contraction for the first time in 13 months.
The preliminary reading of the HSBC index is one of earliest indicators to shed light on the Chinese economy’s performance each month.
“As November’s flash reading of HSBC manufacturing PMI bounced back to the expansionary territory for the first time in 13 months, this confirms that the economic recovery continues to gain momentum towards the year end,” Qu Hongbin, chief China economist at HSBC, wrote in a note accompanying the survey results on Thursday.
If confirmed in the index’s final reading on December 3, the improved performance would show that the slowdown in growth that buffeted China for much of the past year has now bottomed out. Relaxations on bank lending, accelerated infrastructure approvals and two small interest rate cuts have helped re-inject some dynamism, analysts said. At the same time, overseas demand for exports also has improved in recent months.
But Qu of HSBC cautioned that the recovery was still in its early stages and global economic growth remained fragile.
At the same time, the double-digit growth rates seen before the financial crisis are now a thing of the past, and China is likely to grow at far more modest rates of 7 to 8 per cent in the coming years, many analysts believe.
© 2012 The New York Times News Service