Chinese industry posts strongest growth seen since April last year

OFFICIAL Chinese government statistics indicated early yesterday morning that the country’s manufacturing sector is expanding at its fastest rate in 16 months.

For August’s manufacturing purchasing managers’ index, the government’s statistical agency recorded a score of 51, the best seen since April last year. Any number above 50 indicates that a sector is growing.

New orders for Chinese factories were particularly strong in the last month, registering a reading of 52.4. Last week, the country’s deputy finance minister Zhu Guangyao announced that the government was confident that China would reach its 7.5 per cent target for growth this year.

Despite a recent tightening of credit conditions, the Chinese economy has suffered less than other emerging markets during August, with other stock exchanges in parts of Asia hit hard throughout the month.

However, the manufacturing indicator still lags behind the previous trend. In previous years, scores in the mid-50s month after month have been fairly common.

Ryutaro Kono of BNP Paribas commented on the economic situation in China generally: “Recent indicators suggest the risk of a sharp slowdown has eased, but because the authorities are unlikely to adopt any big stimulus packages out of fear of aggravating already soaring property prices, growth probably won’t accelerate significantly.”