China’s manufacturing sector expanded for the eighth straight month in October, pointing to further signs that the recovering economy is on firmer ground, a survey by an industry group said on Sunday.
The state-sanctioned China Federation of Logistics and Purchasing said its purchasing managers index, or PMI, rose to 55.2, nearly a full point higher than in September on the 100-point scale. Numbers above 50 show manufacturing activity expanding.
Signs of a more robust expansion follow an already healthy economic recovery, with China clocking 8.9 percent growth in the third quarter - the highest rate for any major economy in a world still trying to shake off the economic crisis.
Economists see the PMI as a valuable measure of upcoming economic activity since it contains information on new orders. In October’s data, seven of the 11 categories measured in the survey of 700 companies rose. Imports - which largely contain materials to be processed for exports - posted a 2.1-point increase, while new orders rose 1.7 points from the previous month.
A government economist hired by the federation to comment on the survey said it showed that domestic demand was picking up and that the economy was on track to continue expanding. “These figures mean that China’s economic growth will continue to accelerate in the next few months,” said Zhang Liqun of the Development Research Center, the Cabinet’s think tank.
The boisterous economic bounce-back has been the result of hefty stimulus spending by the government and a flood of lending by the state banking system. The policies have also led to overcapacity in some industries and other waste that the government is trying to curb. But Commerce Minister Chen Deming told a forum on Saturday that easing back on stimulus spending too early could undermine the more fragile recovery under way in the global economy.
The petrochemical industry received a boost Sunday from the Commerce Ministry, which imposed tariffs of up to 35.4 percent on imports of adipic acid from the United States, European Union and South Korea to stop what the agency said was the dumping of the chemical at too low a cost on the Chinese market. Adipic acid is an ingredient in nylon and polyurethane and other resins used in manufacturing.
