China factory activity picks up gauges show
01 Apr 2013
China's factory activity was helped by stronger domestic demand and rebounded last month, with new orders rising sharply in a sign that the underlying economic recovery continued to be robust, surveys showed today.
The country's official manufacturing purchasing managers' index (PMI) released by the National Bureau of Statistics was up at an 11-month high of 50.9 in March, above the 50-point level that indicated growth for the month.
A separate survey by HSBC showed its final PMI rising to 51.6 last month, up from 50.4 for February.
According to analysts, the twin PMI surveys indicate that the speed of revival in the world's No 2 economy might not be as brisk as some think, as unsteady foreign demand for Chinese exports remained a constraint.
According to most economists China's economy would likely enjoy a steady but gentle recovery this year, driven internally by infrastructure investment as also household consumption, following growth striking 13-year lows in 2012 due to falling demand for Chinese exports.
The benchmark Shanghai Composite Index of stocks retreated 0.1 per cent at the close. The gauge fell 3.9 per cent last week, the most in five weeks, while the yuan gained strength for the fifth straight week and touched a 19-year high.
Zhang Zhiwei, chief China economist at Nomura Holdings Inc in Hong Kong, wrote in a note today that the reports ''reinforce our view of a weak economic recovery'' in the first half and a ''sharp slowdown'' in the second half.
Meanwhile, China's largest cities, including Beijing and Shanghai, tightened rules on home purchases, effective yesterday, following a call for stepping up efforts to cool the property market by the central government. The country's banking regulator told lenders last week to limit investments of client funds in debt that was not traded publicly and to isolate such risks from their operations.
The national banking regulator told lenders last week to limit investments of client funds in debt that was not publicly traded as also to isolate such risks from their operations.
Gross domestic product expanded 7.9 per cent in the final three months of last year following a 7.4 per cent gain in the previous quarter, in a reversal of a seven-quarter slowdown.
In a research report last week, Goldman Sachs said China's export statistics probably overstated growth in the last few months, potentially because companies provided inflated data.
