Manufacturing data shows China, world recovering
Data points to strong gains in manufacturing activity in the US, China and euro zone
Business surveys yesterday suggested the world economy is on the mend, with US and Chinese manufacturing activity at multi-month highs and better-than-expected growth in the euro zone.
A preliminary reading of the HSBC China Manufacturing PMI rebounded to a four-month high of 50.1, compared with last month's final reading of 47.7. New orders surged to 50.5 from 46.6, although external situation remained lacklustre.
The upside surprise suggests that the recent fine-tuning of government policy has begun to feed into improvement in domestic demand conditions
The upside surprise "suggests that the recent fine-tuning of government policy has begun to feed into improvement in domestic demand conditions", said JP Morgan China chief economist Zhu Haibin.
Zhu said Beijing appeared keen to selectively support infrastructure investment in areas such as railway and urban facilities, hinting at solid public-sector fixed-assets investment growth in coming months.
The small-enterprise-dominated HSBC PMI's return above the threshold of 50 matches an expansionary trend shown in official PMI data in recent months.
Economists are beginning to revise upwards their forecasts about China's growth outlook, after hastily cutting predictions during the second quarter.