The mainland's manufacturing output last month expanded at the fastest pace in half a year, indicating robust economic momentum and the prospect of escalating inflation.
Two purchasing managers' indices released yesterday showed unexpectedly high readings for last month, thanks to strong output, growing new orders and rising input prices.
The purchasing managers' index (PMI), released by the China Federation of Logistics and the National Bureau of Statistics, rose from 53.8 in September to 54.7 in October. A second PMI, from HSBC Holdings and Markit Economics, jumped from 52.9 to 54.8.
The climbing PMI is expected to relieve concerns of economic slowdown, but add to inflation woes and concerns of more interest rate rises in the near future.
'This better-than-expected indicator provides reassurance that China's growth is very robust. In retrospect, policymakers' concerns about a hard landing were overblown, and monetary policy tightening could have started earlier,' said Shen Jianguang, an economist with Mizuho Securities Asia.
The mainland's official PMI has been at levels above 50 for 20 consecutive months. A reading above 50 indicates economic expansion. Manufacturers' output jumped from 56.4 in September to 57.1 in October. New orders were near boom levels last month, bolstered by the construction of welfare homes and accelerated work on stimulus projects, the logistics federation said.
