BEIJING: China’s manufacturing activity expanded for a second straight month in September, HSBC reported on Monday, suggesting a rebound in the world’s second-biggest economy is building momentum.
The bank’s closely watched purchasing managers’ index (PMI) for the month rose to 50.2 from 50.1 in August and well up from an 11-month low of 47.7 seen in July.
A reading higher than 50 signals growth while anything below that indicates contraction.
“Though only slight, this was a positive development,” the British banking giant said in a statement.
The news is the latest sign that the Asian economic giant is picking up speed after suffering a slowdown at the start of the year.
The economy registered growth of 7.7 percent in 2012—the worst performance in 13 years—7.7 percent in the first three months of this year and 7.5 percent in April-June.
But recent data, including strong exports and industrial output, have pointed to renewed strength. China has refrained from introducing major stimulus measures, but in late July it announced a number of steps to bolster growth, including reducing taxes on small companies and encouraging railway development.
Authorities would likely maintain small-scale efforts to support growth, HSBC chief economist Qu Hongbin said in a statement.
“Growth is bottoming out on Beijing’s mini-stimulus,” Qu said.
“We expect continuous policy efforts to sustain the recovery,” the analyst added.
South Korea industrial output
Meanwhile, South Korea’s industrial output grew at the fastest pace for nine months in August on robust car and mobile phone production, state data showed on Monday.
Production in the mining, manufacturing, gas and electricity industries rose 1.8 percent from a month ago, following a revised 0.3 percent fall in July, according to Statistics Korea.
It was the fastest expansion since the 2.1 percent growth posted in November last year.
Compared to a year ago, the August output rose 3.3 percent—the highest on-year gain since January. Production of cars as well as televisions and mobile phones—the country’s key exports—climbed 18.9 percent and 11.1 percent, respectively, from July.
Asia’s fourth-largest economy has shown signs of a moderate revival, posting its strongest on-quarter growth for two years at 1.1 percent in the April-June period.
The central bank expects the economy to grow 2.8 percent this year after expanding 2.0 percent in 2012—the slowest in three years.