China manufacturing hits 13-month high in November
BEIJING - Manufacturing activity in China hit a 13-month high in November, HSBC said Monday, in another sign that the world's second largest economy is emerging from a drawn-out slumber.
The banking giant's purchasing managers' index (PMI) hit 50.5 last month, up from 49.5 in October, putting it above the 50 mark that indicates growth. A reading below signals contraction.
The figure signals a return to growth after 12 consecutive months of contraction as the crucial sector has been hit by a global slowdown and the debt crisis in key market Europe, where demand for Chinese goods has slumped.
China's official PMI reading also showed expansion in November for the second month in a row, hitting 50.6 last month, from 50.2 in October and 49.8 in September.
Despite the news Shanghai's composite index slipped, trading 0.28 percent lower in early trade.
The HSBC index, compiled by information services provider Markit, tracks manufacturing activity and is a closely watched barometer of the health of the economy.
Qu Hongbin, a Hong Kong-based economist with HSBC, said the figure was helped by increasing new business and expanding production. "This confirms the Chinese economy continues to recover gradually," he said.
The bank expects China's economic growth to pick up modestly to around eight percent in the fourth quarter "as the easing measures continue to filter through", he added.
Economic growth hit a more than three-year low of 7.4 percent in the third quarter from July to September.
But recent data has fuelled optimism that the worst is over. Exports, industrial production, retail sales and fixed asset investment -- a key gauge of infrastructure spending -- have all shown improvement.
Premier Wen Jiabao and Commerce Minister Chen Deming have both said in recent months that they expect China to achieve its targeted 2012 growth rate of 7.5 percent despite the impact of the global slowdown.
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