Slowdown in China 'is stabilising'
Published 03/01/2012 | 08:00
A Chinese manufacturing gauge has risen by more than economists expected, suggesting that the slowdown in the world's second-biggest economy may be stabilising.
The purchasing managers' index was 50.3 in December from 49 in November, according to a statement from the statistics bureau and China's logistics federation.
The reading exceeded all forecasts in a Bloomberg News survey of 15 economists where the median estimate was 49.1.
President Hu Jintao said in his new year address that China aims for steady and "relatively fast" growth in 2012 amid an increasingly unstable global recovery.
Europe's sovereign-debt crisis and a crackdown on speculation in China's housing market may limit the expansion and officials are also grappling with banks' bad-loan risks after a record jump in credit in 2009 and 2010.
"Growth momentum will continue to wane this quarter, as the European crisis will hurt China's exports and a cooling property market will drag down domestic demand," said Zhang Zhiwei, a Hong Kong-based economist at Nomura Holdings Inc. who has previously worked for the International Monetary Fund. "The rebound does not signal that the economy has turned around."
A separate index released by HSBC Holdings Plc and Markit Economics on December 30 indicated that manufacturing contracted for a second month while the gauge also rose. The studies have different sample sizes and methodologies.
The Shanghai Composite Index tumbled 22% last year, the most since 2008, on concern that monetary tightening and efforts to rein in property prices in big cities will derail growth. The index's 33% drop since 2009 makes it the worst performer among the world's 15 biggest markets.