China manufacturing activity in January close to 2-year high

BEIJING — Chinese manufacturing expanded in January at close to its fastest pace in two years as heavy government spending and a bank lending boom helped to keep economic activity steady headed into 2017, a survey showed Wednesday.

The National Bureau of Statistics' purchasing managers index showed manufacturing growth at 51.4 on a 100-point scale on which numbers above 50 indicate an expansion. That was down only slightly from November's two-year high of 51.7.

Growth in the world's second-largest economy declined to 6.7 percent last year, down from 2015's 6.9 percent and the weakest rate since 1990. Heavy government spending and a boom in real estate sales and bank lending helped prevent it from cooling further.

Forecasters expect growth to weaken further this year as regulators try to cool what analysts warns is a dangerously fast run-up in debt and rising housing costs. The International Monetary Fund is predicting this year's growth will slow to 6.5 percent.

The latest data show a "relatively strong start to the year," Julian Evans-Pritchard of Capital Economics said in a report.

"The more important question is whether or not the current strength will be sustained," said Evans-Pritchard. "We doubt that it will be given how reliant the recent recovery has been on support from monetary and fiscal policy that is now being withdrawn."

Manufacturers have been battered by a slump in global demand for Chinese goods and steadily declining domestic economic activity.

Exports shrank by 7.7 percent last year compared with 2015 while growth in Chinese retail sales decelerated to 9.6 percent from the previous year's 10.6 percent.

Chinese leaders have used repeated infusions of credit to prevent a sharper slowdown, which has temporarily set back efforts to reduce reliance on trade and debt-supported investment.

A decline in construction spending as Beijing tightens controls in lending should weigh on demand for steel and other manufactured goods.

The health of Chinese manufacturing is important to other Asian economies that supply raw materials and industrial components and to exporters of oil, iron ore and other commodities such as Australia and Brazil.

Some individual indicators for new orders and other factors declined slightly in January, but "industrial operations remain in the boom range," said economist Zhang Liqun in a statement released by the NBS and an industry group, the China Association for Logistics and Purchasing.

Related News

Asian stocks mostly higher after Wall Street...

Aug 17, 2016

Asian stock markets were mostly higher Wednesday after Wall Street declined

Global stocks dip ahead of release of Fed minutes

Aug 17, 2016

Global stocks and the price of oil dipped Wednesday as investors awaited the release of the minutes...

Asian stocks climb on signs US rate hike off...

Aug 18, 2016

Asian stocks rose Wednesday after Wall Street edged higher on news the U.S. Federal Reserve is in...

Global stocks climb on signs US rate hike not...

Aug 18, 2016

Global stocks rose Thursday after Wall Street edged higher on news the U.S. Federal Reserve is in...

China tightens control of online news after...

Aug 19, 2016

The Chinese government is holding chief editors of news websites personally liable for content...

World stocks slip as investors eye timing of Fed...

Aug 19, 2016

World stock markets have turned lower as investors speculate whether the U.S. Federal Reserve will...

You may also like these

Global stocks dip ahead of release of Fed minutes

Aug 17, 2016

Global stocks and the price of oil dipped Wednesday as investors awaited the release of the minutes...

China tightens control of online news after...

Aug 19, 2016

The Chinese government is holding chief editors of news websites personally liable for content...

World stocks slip as investors eye timing of Fed...

Aug 19, 2016

World stock markets have turned lower as investors speculate whether the U.S. Federal Reserve will...

May says Britain still inspires confidence...

Sep 5, 2016

After meeting with other world leaders during the G-20 summit, British Prime Minister Theresa May...

Trump in Asia: Region poised for change as new...

Jan 24, 2017

People across Asia are poised for a potentially dramatic change in relations with Washington under...

About Us

Established in 2015, The Upstocker provides insights on financial reports, commentary, and investment data to traders so that you can make better investment decisions.

Contact us: sales@theupstocker.com

Subscribe Now!