Manufacturing activity at Chinese private and export-oriented companies improved for the first time in 13 months, a survey showed this morning.
The HSBC Purchasing Managers' Index, a measure of Chinese manufacturing activity weighted more in favor of private and export-oriented companies, rose to 50.5 in November from 49.5 in October. A reading above 50 means expansion in manufacturing activity.
It was the first time for China's PMI to top 50 in 13 months, HSBC Holdings Plc and research firm Markit said.
Qu Hongbin, chief economist for China and co-head of Asian Economic Research at HSBC, said the final reading of PMI confirms that the Chinese economy is continuing to recover.
"The 13-month high PMI is obtained on increasing new business and expanding production," Qu said. "We expect the economic growth to rebound modestly to around 8 percent in the fourth quarter as the easing measures continue to filter through."
Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd, said China's economic growth is stabilizing but may need more monetary easing, such as a cut in reserve requirement ratio this month because market liquidity is getting tight after a large amount of reserve repurchase agreements is maturing.
The HSBC PMI component indices also showed that production in November increased for the first time since July. New orders rose for two months in a row and input prices also gained for a second month.
Activities of large state-owned manufacturers also improved in November with the official Purchasing Managers' Index touching a seven-month high of 50.6, the China Federation of Logistics and Purchasing said over the weekend.