China’s factory output at seven-month high in October
24 Oct 2013
China's manufacturing output rose to a seven-month high in October, suggesting continued recovery for the world's second-biggest economy, despite surging home prices and high local-government debt.
The preliminary reading for the Purchasing Managers' Index released today by HSBC Holdings and Markit Economics compared stood at 50.9. Readings above 50 indicate expansion.
The report follows Chinese data earlier this month that showed quarterly economic growth rose to 7.8 per cent after hitting a two-decade low in the second quarter, easing pressure for further stimulus and allowing leaders to focus on reforms.
The report, released before a similar official survey, provides an early indication each month of the health in China's mammoth manufacturing sector.
Output, new orders and new export orders all increased at a faster rate, according to the survey, which is based on 85-90 per cent of responses from 420 factories.
HSBC's chief China economist Qu Hongbin said the reading improved thanks to "broad-based modest improvements,'' which imply that the recovery is consolidating.
"This momentum is likely to continue in the coming months, creating favorable conditions for speeding up structural reforms,'' Qu said.
China's leaders are scheduled to meet in November to draw up a blueprint for economic development.
They have said their priority is longer-term reforms aimed at guiding the economy to slower, more sustainable growth based on domestic consumption rather than exports and investment.
