China’s factory growth held at an
18-month high in November on firm domestic and foreign demand, defying
expectations the economy faces a modest slowdown as 2013 draws to a
close.
Reuters reported that the
official Purchasing Managers’ Index stood at 51.4 in November, the
National Bureau of Statistics said, unchanged from October and ahead of
market expectations for a reading of 51.1.
Investors had expected the PMI, one of
the earliest pieces of Chinese data released each month, to show China’s
economy decelerated in the fourth quarter on slacker credit growth,
fragile global demand, and slower restocking of inventories by firms.
“Growth momentum held up in November,”
said Louis Kuijs, an economist at RBS in Hong Kong. “The export order
data suggests that global demand – key to the outlook for China’s
manufacturing – improved a bit.”
A sub-index for export orders nudged
higher to 50.6 in November from 50.4 in October, hovering above the
50-point threshold separating growth from contraction.
Experts will welcome the unexpected PMI
strength as a sign that China can press on with sprawling plans outlined
last month to cut back central economic planning without fear of
endangering growth.
After three decades of double-digit
growth, analysts say China’s economy has reached a turning point where
traditional growth drivers of heavy investment and brisk export sales
must make way for a more sustainable expansion in consumption.
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