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China Manufacturing Continued To Expand In November

Pubdate:2009-12-01Source:chinesesongHits:loading

(Combines CFLP and HSBC PMIs, adds economists' comments on surveys' results, Taiwan PMI.)

BEIJING (Dow Jones)--China's manufacturing activity continued to expand in November, supported by strengthening demand both at home and abroad, according to two nationwide purchasing managers surveys.

The HSBC China Manufacturing Purchasing Managers Index rose to 55.7 in November from 55.4 in October, HSBC said Tuesday. November was the eighth consecutive month in which the PMI was above 50.0, after being below that level for eight months.

A PMI reading above 50.0 indicates the manufacturing sector is expanding, while a reading below 50 indicates contraction.

China's official PMI was unchanged at 55.2 in November compared with October, marking the ninth straight month in which the PMI was above 50, the China Federation of Logistics and Purchasing said Tuesday.

The two surveys show new orders continued to grow in November, and employment improved. However, prices of raw materials rose rapidly, which could contribute to inflation pressures.

"The sustained improvement in the HSBC China Manufacturing PMI implies that China's recovery has consolidated," said Hongbin Qu, HSBC's chief economist for China.

"Despite the increasing inflationary pressure on input prices, inflation in finished goods will be relatively mild given the still excessive capacity in many sectors," Qu said.

The HSBC China Manufacturing PMI, which is compiled with U.K.-based research firm Markit Group Ltd., is issued on the first working day of every month for the previous month's data.

CFLP analyst Zhang Liqun said the federation's PMI reading shows "the future economic recovery trend may have consolidated," and called the continued improvement in manufacturing "a positive change."

The CFLP and the National Bureau of Statistics launched the PMI in 2005. The federation issues the PMI on the first day of every month for the previous month's data.

J.P. Morgan China Equities & Commodities Chairwoman Jing Ulrich said: "While public investment may moderate, private real estate investment, consumer spending and export demand should drive growth in the coming months."

Meanwhile, the HSBC Taiwan PMI showed manufacturing activity continued to expand on the island.

The HSBC Taiwan PMI fell to 58.4 in November from 59.8 in the previous month, HSBC said Tuesday. November was the ninth consecutive month in which PMI has been above 50.0.

Of the 11 categories comprising the CFLP index, four rose, four fell and three were flat in November compared with October, the federation said.

The new export orders component fell to 53.6 in November from 54.5 in October, it said.

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