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Index shows factories backin growth after 13 months (2)

By Wang Yanlin (Shanghai Daily)

08:16, November 23, 2012

Further improvement

He expected industrial production to improve further this month and fourth-quarter economic growth to pick up to around 7.8 percent from 7.4 percent in the third quarter.

Some analysts have cautioned that a Chinese recovery may turn out to be "L-shaped," meaning the decline might have stopped but improvements in growth would be gradual.

Jing Ulrich, chairwoman of China equities at JP Morgan, said China's economy had improved since May after supportive policies were introduced.

"We are upbeat about the outlook. But there remain a lot of uncertainties, including the European debt crisis and the United States fiscal cliff," Ulrich said. "China needs to maintain a proactive fiscal policy stance and a neutral monetary policy stance to secure the current recovery."

The component indices of the HSBC Flash PMI showed that output expanded to 51.3 in November from 48.2 a month earlier and new export orders rose for the first time since April 2012, while employment contracted at a slower pace.

China's economy showed signs of recovery with better-than-expected performance in September and October. Key growth indicators such as industrial production, retail sales and fixed-asset investment all grew faster while inflation moderated to its slowest since February 2010.

In particular, China's industrial production gained 9.6 percent annually in October, accelerating from 9.2 percent in September and 8.9 percent in August.

The official Purchasing Managers' Index, compiled by the China Federation of Logistics and Purchasing, returned to expansion with a reading of 50.2 in October. The index gives a higher weight to large state-owned enterprises.

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