Survey: Chinese manufacturing heats up in November

Beijing – Chinese manufacturing activity accelerated in November, a survey showed Thursday, adding to signs of a pickup in global and domestic demand.

The China Federation of Logistics and Purchasing said its purchasing managers’ index rose to 52.4 from October’s 51.6 on a 100-point scale on which numbers above 50 show activity accelerating.

Components of the survey that measure imports, exports and new orders all improved, while employment indicators fell to the lowest level in a year.

“The breakdown shows a broad-based pickup in demand,” said Julian Evans-Pritchard of Capital Economics. However, he cautioned that the measure has given “false signals” about the economic trends in the past.

Chinese economic growth has been unexpectedly strong this year, but forecasters expect activity to weaken as Beijing tightens controls on bank lending to cool a rise in debt cited by analysts as the biggest threat to China’s economic stability.

The growth rate edged down to a still-robust 6.8 per cent over a year earlier in the latest quarter from the previous quarter’s 6.9 per cent.

That was buoyed by strength in retail spending and exports.

Since then, regulators have tightened controls over asset management companies and rein in the growth of a micro-lending industry. That triggered a fall in Chinese stocks.

Manufacturing activity is likely to slow despite the latest positive indicators, said Evans-Pritchard.

“We doubt the current momentum in manufacturing will be sustained given that the sector faces increasing headwinds in the months ahead from the anti-pollution campaign, slower credit growth, reduced fiscal support and a cooling property market,” he said.

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China Federation of Logistics & Purchasing (in Chinese): www.chinawuliu.com.cn