China's industrial activity to reach a 14-month high
By Wang Yanlin |
December 15, 2012, Saturday
|
Print Edition
Print Edition
China's manufacturing activity is expected to rise to a 14-month high this month, adding to signs that the world's second-largest economy is recovering, but export orders weakened, according to an HSBC survey.
The HSBC Flash China Manufacturing Purchasing Managers' Index, the earliest available indicator of the industrial sector's vitality, was 50.9 this month, up from November's 50.5. A reading over 50 indicates expansion.
Qu Hongbin, chief economist for China at HSBC, said the survey, slanted toward private and export-oriented firms, confirmed that China's recovery was gaining momentum, driven by domestic demand.
"However, the drop of new export orders and the downside surprise of November exports growth suggests persisting external headwinds, and they call for an accommodative policy stance to counterbalance the external weakness," Qu said.
The survey showed that production in December fell to a two-month low of 50.5 from 51.3 a month earlier, and new export orders dropped below 50 from November's 52.4. But the operating environment appeared to have improved, as input prices increased at a slower rate.
Exports edged up just 2.9 percent in November, compared to October's 11.6 percent surge.
Chang Jian, an economist at Barclays, said that external demand remained soft and was posing the biggest threat to the economy.
"It supports our view of a gradual recovery but no sharp rebound, and that external uncertainty remains the biggest downside risk to the Chinese economic outlook in 2013," Chang said.
Barclays is maintaining its forecast that the economy will expand 7.8 percent from a year earlier in the fourth quarter, up from the 7.4 percent rise between July and September.
"The central themes for 2013 may be supportive fiscal policy, a neutral monetary stance, gradual reforms, a moderate recovery, and higher but manageable inflation," Chang said.
The upcoming Central Economic Work Conference, which will set the tone for next year's economic policies, is expected to announce a growth target of 7.5 percent for 2013, the same as for this year.
Last week, the Chinese Academy of Social Sciences said economic growth may strengthen to 8.2 percent in 2013 from an expected 7.7 percent this year in response to supportive policies.
Its report said China had enough fiscal and monetary room to unveil further policies to stabilize economic growth when necessary.
At a meeting earlier this month, the Political Bureau of the Party's Central Committee said that it would maintain the stability of its macroeconomic policies.
The HSBC Flash China Manufacturing Purchasing Managers' Index, the earliest available indicator of the industrial sector's vitality, was 50.9 this month, up from November's 50.5. A reading over 50 indicates expansion.
Qu Hongbin, chief economist for China at HSBC, said the survey, slanted toward private and export-oriented firms, confirmed that China's recovery was gaining momentum, driven by domestic demand.
"However, the drop of new export orders and the downside surprise of November exports growth suggests persisting external headwinds, and they call for an accommodative policy stance to counterbalance the external weakness," Qu said.
The survey showed that production in December fell to a two-month low of 50.5 from 51.3 a month earlier, and new export orders dropped below 50 from November's 52.4. But the operating environment appeared to have improved, as input prices increased at a slower rate.
Exports edged up just 2.9 percent in November, compared to October's 11.6 percent surge.
Chang Jian, an economist at Barclays, said that external demand remained soft and was posing the biggest threat to the economy.
"It supports our view of a gradual recovery but no sharp rebound, and that external uncertainty remains the biggest downside risk to the Chinese economic outlook in 2013," Chang said.
Barclays is maintaining its forecast that the economy will expand 7.8 percent from a year earlier in the fourth quarter, up from the 7.4 percent rise between July and September.
"The central themes for 2013 may be supportive fiscal policy, a neutral monetary stance, gradual reforms, a moderate recovery, and higher but manageable inflation," Chang said.
The upcoming Central Economic Work Conference, which will set the tone for next year's economic policies, is expected to announce a growth target of 7.5 percent for 2013, the same as for this year.
Last week, the Chinese Academy of Social Sciences said economic growth may strengthen to 8.2 percent in 2013 from an expected 7.7 percent this year in response to supportive policies.
Its report said China had enough fiscal and monetary room to unveil further policies to stabilize economic growth when necessary.
At a meeting earlier this month, the Political Bureau of the Party's Central Committee said that it would maintain the stability of its macroeconomic policies.
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