December boost for manufacturers (2)

Lian Ping, chief economist with the Bank of Communications, said that as short-term domestic market confidence has almost recovered and investment is picking up, industrial enterprises will start to increase inventory in 2013. He expects industrial production growth to stabilize this year.

The Bank of Communications forecast that industrial output for 2012 will increase 10 percent from a year earlier, and will rise to 11 percent in 2013.

The improving economic indicators encouraged Chinese investors at the end of 2012, with the Shanghai Composite Index rallying 1.61 percent on the last trading day of 2012 to 2,269.13 points.

Zhang Liqun, an analyst with the Development Research Center of the State Council, said on Tuesday that more advantages will emerge in 2013 to support growth and to improve the economic environment.

However, the modest rebound in the PMI and weak growth in new orders show that recovery in the manufacturing sector may suffer setbacks along the way, Zhang said.

"It still needs more measures to expand domestic demand to consolidate the improving economic situation."

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