adminBeijing. — Chinese manufacturing grew more than analysts estimated 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 yesterday in Beijing.
That’s the same reading as October, which was an 18 month high, and exceeded 24 out of 26 estimates in a Bloomberg News survey.
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 percent 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 Ltd in Hong Kong. “As policy makers can be assured of growth over 7,5 percent, the attention is now firmly on reform.”
China’s benchmark Shanghai Composite Index of stocks rose 3,7 percent 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.
Economists estimate growth in gross domestic product will slow to 7,5 percent next year from 7,6 percent this year, according to the median projection in Bloomberg News surveys last month. The government set a target for 7,5 percent expansion in 2013 and Li said in October that China needs annual growth of 7,2 percent to keep unemployment stable. The median estimate for today’s PMI was 51,1 with projections ranging from 50,8 to 51,5. The reading contrasts with a decline to 50,4 from October’s 50,9 in the preliminary figure of a separate gauge from HSBC Holdings Plc and Markit Economics released November 21. The final number is due tomorrow. Numbers above 50 signal expansion in manufacturing while readings below point to a contraction.
The PMI for large companies in yesterday’s report rose to 52,4 from 52,3 in October, the highest level in 19 months, while the gauge for small companies slid to 48,3 from 48,5, the statistics bureau said.
“It’s clear that the improvements are coming from the big enterprises and there’s little improvement in the structure” of demand, said Hu Yifan, chief economist at Haitong International Securities Group Ltd in Hong Kong.
“Small companies will only recover when the overall macroeconomic situation recovers, once the economy starts to push from the bottom.” — Bloomberg.
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