Manufacturing gains pace, firing up stock prices

13:36, April 01, 2010      

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China's industrial production gained impetus in March after a relative lull in February when Chinese spent a long Spring Festival holiday. The growing strength in the country has brightened the prospect of worldwide economy recovery.

The China Federation of Logistics and Purchasing said its purchasing manager's index, or PMI, rose to 55.1 in March from a mere 52 in February. Numbers above 50 show manufacturing activity expanding. The index has remained above 50 for 13 straight months after a slowdown in late 2008 and early 2009.

Asian stock markets rose mostly on Thursday. By midday, the index in the Shanghai and Shenzhen stock exchanges rose by about 1 percent. In Japan, a key report showed companies' confidence about business outlook rose a fourth straight quarter.

Taken together, the reports suggested international trade was on the mend and contributed to a growing belief the global economy can avoid slipping back into recession.

The PMI for January was 55.8. But a long holiday for the Lunar New Year, coupled with unusually cold, snowy weather slowed activity in February.

A separate index issued by HSBC Corp. climbed to 57.0 in March, up from 55.8 in February but still below its reading of 57.6 in January.

The month of March often represents a return to normal growth. And, the country's reviving industrial activity will likely be supported by recovery in external demand and rising domestic consumption.

China's central bank said in a policy statement late Wednesday that it will continue to guarantee a "normal flow" of credit to bolster economic activity, though growing choruses of economists have asked the central government for sterner measures to curb runaway urban housing prices and rein in accelerating inflation.

By People's Daily Online


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