Industrious efforts pay handsome dividends
By Wang Yanlin |
April 2, 2010, Friday
|
Print Edition
Print Edition
MANUFACTURING across the nation grew at a faster pace in March, indicating an even stronger expansion in the industrial sector after the Chinese New Year holiday, two key indices showed yesterday.
However, analysts said the robust growth momentum added pressure for China to wind down stimulus measures to avoid overheating and inflation in the economy.
The official Purchasing Managers' Index, a yardstick of manufacturing activities, increased 3.1 percentage points from a month earlier to 55.1 in March, the China Federation of Logistics and Purchasing said.
The HSBC China Manufacturing PMI rose to 57, its third-highest level on record and up from 55.8 in February.
Fifty is the threshold indicating expansion.
Export indicator
Compared with the official PMI, which is weighted heavily towards big domestic companies, the HSBC survey is slanted more toward privately owned and export-oriented firms.
"China's official PMI, which has kept an expanding momentum for 13 straight months, reflects a robust manufacturing sector supported by strong demand from both domestic and overseas markets," said Li Maoyu, an analyst at Changjiang Securities Co.
"However, policy makers should notice China's fast growth in industrial output in recent months and take preemptive measures to avoid overheating in the economy."
China's industrial production climbed 20.7 percent from a year earlier in the January-February period, up from the increase of 18.5 percent in December.
This was consistent with the sharp rebound in exports and strong retail sales.
Rapid pace
Qu Hongbin, chief economist at HSBC, expects China's gross domestic product to post double-digit growth again in the first quarter of this year based on the PMI figures.
"With inflation pressures rapidly accumulating, this lifts the chance of interest-rate increases in coming months," Qu said.
China's GDP returned to an annualized double-digit growth of 10.7 percent in the fourth quarter of last year, the fastest pace in more than two years after the government launched massive economic stimulus measures.
All 11 component indices of the official PMI recorded higher readings than in the previous month.
The output index jumped to 58.4 in March from 54.3 in February, and the forward-looking new orders index rose to 58.1 from 53.7. The purchase component index surged to 58.1 from 51.9.
After strong orders and purchases, the input price index jumped to 65.1 from 61.1, suggesting upward pressure on producer prices, the factory-gate gauge of inflation.
However, analysts said the robust growth momentum added pressure for China to wind down stimulus measures to avoid overheating and inflation in the economy.
The official Purchasing Managers' Index, a yardstick of manufacturing activities, increased 3.1 percentage points from a month earlier to 55.1 in March, the China Federation of Logistics and Purchasing said.
The HSBC China Manufacturing PMI rose to 57, its third-highest level on record and up from 55.8 in February.
Fifty is the threshold indicating expansion.
Export indicator
Compared with the official PMI, which is weighted heavily towards big domestic companies, the HSBC survey is slanted more toward privately owned and export-oriented firms.
"China's official PMI, which has kept an expanding momentum for 13 straight months, reflects a robust manufacturing sector supported by strong demand from both domestic and overseas markets," said Li Maoyu, an analyst at Changjiang Securities Co.
"However, policy makers should notice China's fast growth in industrial output in recent months and take preemptive measures to avoid overheating in the economy."
China's industrial production climbed 20.7 percent from a year earlier in the January-February period, up from the increase of 18.5 percent in December.
This was consistent with the sharp rebound in exports and strong retail sales.
Rapid pace
Qu Hongbin, chief economist at HSBC, expects China's gross domestic product to post double-digit growth again in the first quarter of this year based on the PMI figures.
"With inflation pressures rapidly accumulating, this lifts the chance of interest-rate increases in coming months," Qu said.
China's GDP returned to an annualized double-digit growth of 10.7 percent in the fourth quarter of last year, the fastest pace in more than two years after the government launched massive economic stimulus measures.
All 11 component indices of the official PMI recorded higher readings than in the previous month.
The output index jumped to 58.4 in March from 54.3 in February, and the forward-looking new orders index rose to 58.1 from 53.7. The purchase component index surged to 58.1 from 51.9.
After strong orders and purchases, the input price index jumped to 65.1 from 61.1, suggesting upward pressure on producer prices, the factory-gate gauge of inflation.
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