China’s manufacturing grows in November in latest sign of possible economic recovery
December 3, 2012 by The Associated Press
China’s manufacturing grew in November in the latest sign the world’s second-largest economy is recovering from its deepest slump since the 2008 global crisis, a survey showed Saturday.
The state-sanctioned China Federation of Logistics & Purchasing’s monthly purchasing managers’ index improved to 50.6 on a 100-point scale on which numbers above 50 indicate activity is expanding. That was up 0.4 points from October’s numbers.
The PMI index measures overall manufacturing activity by surveying numerous indicators including orders, employment and actual production.
The Chinese numbers are rare good news for the world economy, which has slowed as Europe’s chronic debt crisis worsened and the American economy stagnated.
The data shows that “economic activity is back, and growth has bottomed out,” IHS Global Insight economists Xianfang Ren and Alistair Thornton wrote in a comment. They said, however, that “we remain cautious about the sustainability of the recent improvement, worrying that much fragility persists.”
Growth in China slowed to a three-year low of 7.4 per cent in the three months ending in September.
Chinese leaders have cut interest rates twice since early June and are pumping money into the economy through higher spending by state companies and on building airports and other public works. They have avoided a larger stimulus after their multibillion-dollar spending in response to the 2008 global crisis fueled inflation and a wasteful building boom.
The November data indicated “economic growth will keep rising in the future by a small margin and in a mild way,” Zhang Liqun, an analyst with the Development Research Center of the State Council, a government think-tank, said in the report.
The logistics federation said new orders rose 0.8 points from the previous month to 51.2 while export orders increased 0.9 points to 50.2. Such data pointed to a further expansion in the coming months, Zhang said.
Analysts have cautioned that a Chinese recovery is likely to be “L-shaped,” meaning the decline might have stopped but improvements in growth should be gradual. That would be a setback for exporters of commodities and other goods that are counting on China to help drive a rebound in global demand.