(MENAFN- Khaleej Times) A Chinese manufacturing gauge exceeded analysts' estimates in November, indicating the nation's economic recovery is sustaining momentum amid government efforts to rein in credit growth.
The Purchasing Managers' Index was 51.4, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in Beijing on Sunday. That's the same reading as October and was higher than 24 out of 26 estimates in a Bloomberg News survey that had a median forecast of 51.1.
Stability in manufacturing growth in the world's second-biggest economy may give Premier Li Keqiang more room to implement policy changes laid out after a Communist Party meeting last month. While industrial investment is picking up and retail sales have increased 13 per cent so far this year, China faces headwinds that include industrial overcapacity, excessive corporate debt and slower export demand.
"This is good news for policy makers as the expected slowdown in growth appears pretty mild," said Shen Jianguang, chief Asia economist at Mizuho Securities Asia in Hong Kong. "As policy makers can be assured of growth over 7.5 per cent, the attention is now firmly on reform."
China's benchmark Shanghai Composite Index of stocks rose 3.7 per cent in November, the biggest monthly gain since August, on optimism that the reform package outlined by Communist Party leaders on November 15 will bolster the economy and corporate earnings. Gauges in the CSI 300 tracking industrial, technology and material producers rallied more than four per cent while utilities declined.
Stable unemployment
Even so, economists estimate growth in gross domestic product will slow to 7.5 per cent next year from 7.6 per cent this year, according to the median projection in Bloomberg News surveys last month. The government set a target for 7.5 per cent expansion in 2013 and Li said in October that China needs annual growth of 7.2 per cent to keep unemployment stable.
Estimates for the federation's Purchasing Managers' Index in Bloomberg's survey ranged from 50.8 to 51.5. The reading contrasts with a decline in the preliminary figure of a separate gauge from HSBC Holdings and Markit Economics released on November 21 to 50.4 from October's 50.9. The median forecast for the final number due today is 50.5.
The PMI survey from the statistics bureau and logistics federation is based on responses from purchasing managers in 3,000 manufacturing companies.
The HSBC survey is based on responses from managers at more than 420 businesses, and is weighted toward smaller private companies.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.