Surveys show China manufacturing gains in August
By Kelvin Chan | AP | Published: 02nd September 2013 11:27 AM |
Chinese manufacturing improved last month, two surveys showed, in the latest signs that a painful and prolonged slowdown in the world's No. 2 economy may be stabilizing.
The HSBC purchasing managers' index released Monday rose to 50.1 in August, as output and new orders edged up slightly and order backlogs rose at the fastest pace in two years.
China's manufacturing had shrunk for the three previous months, falling to an 11-month low in July, according to the index.
The report comes a day after an official survey by the China Federation of Logistics and Purchasing showed manufacturing expanded for the second month in a row.
The group's manufacturing index rose to 51.0 from July's 50.3, which was the highest level and biggest increase this year.
Both indexes use a 100-point scale on which numbers below 50 indicate contraction.
The signs of improvement in China's massive manufacturing industry will offer encouragement to China's leaders, who are trying to reverse a slowdown that's pulled economic growth to a two-decade low of 7.5 percent in the latest quarter.
"Growth in China's manufacturing sector has started to stabilize on the back of a modest rebound of new orders and output," said HSBC's chief China economist, Qu Hongbin. "This was mainly driven by the initial filtering through of recent stimulus measures and companies' restocking activities."
China's leaders say they're comfortable with slower growth as they try to steer the economy away from an export-driven model to one based on domestic consumption. They've opted for measures to bolster individual areas of the economy such as railways and small businesses rather than an across-the-board stimulus.
HSBC's survey, based on responses from 420 companies, confirms a preliminary version released last month.