Sun, Nov 04, 2012 - Page 13 News List

Non-manufacturing industries rebound in China, data show

Bloomberg

China’s non-manufacturing industries rebounded from the slowest expansion in at least 19 months, adding to signs the world’s second-biggest economy is recovering after a seven-quarter slowdown.

The purchasing managers’ index rose to 55.5 last month from 53.7 the previous month, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in Beijing yesterday.

September’s reading was the weakest since a new seasonally adjusted series of the gauge began in March last year.

Yesterday’s report may bolster expectations for a recovery in economic growth this quarter after a similar measure for manufacturing expanded for the first time in three months. The data may reduce pressure on policy- makers to roll out more stimulus as they start a once-a-decade power transfer next week.

“There are increasing signs that the pickup of economic activity in September is more than a one-off phenomenon,” Ding Shuang (丁爽), senior China economist at Citigroup Inc in Hong Kong, said before the announcement.

The central bank “seems determined to keep liquidity adequate and monetary policy remains accommodative,” he said.

China’s economic growth cooled to a three-year low of 7.4 percent in the third quarter as Chinese Premier Wen Jiabao’s (溫家寶) campaign to curb consumer and property prices damped domestic demand and a sluggish global recovery capped the nation’s exports.

Bank of America Corp this week raised its estimate for fourth-quarter economic growth to 7.8 percent from 7.5 percent, while Nomura Holdings Inc projects a rebound to 8.4 percent after the government cut interest rates, accelerated investment spending and project approvals and cut taxes.

The Shanghai Composite Index, the nation’s benchmark stock gauge, had its strongest weekly rally in more than a month on speculation that economic growth is rebounding, rising 2.5 percent in the five days ending on Friday.

“The preemptive fine-tuning of macro-economic policies and structural reform measures are gradually taking effect and the economy is expected to keep steady and relatively rapid growth,” the People’s Bank of China said in its monetary policy report released on Friday.

While priority will be given to ensuring stable growth, the government will stick to a prudent monetary policy and strengthen policy fine-tuning, it said.

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