Chinese manufacturing activity, producer prices on the rise

China’s manufacturing sector continued to expand in January, according to two industry surveys, although producer prices also rose sharply, the Wall Street Journal reported. The HSBC China Manufacturing Purchasing Managers Index (PMI) reached a record high of 57.4 in January, up from 56.1 in December. It is the fourth straight month that the index has posted an increase. A reading above 50 indicates an expansion in manufacturing. A separate PMI released by the China Federation of Logistics and Purchasing (CFLP) was 55.8 in January. This is down from 56.6 in December, but the index has now stayed above 50 for 11 consecutive months. Both PMI surveys found that input costs rose in January, with HSBC noting that input price inflation was the strongest since July 2008. "Exports’ positive role in the economic growth will strengthen, but higher costs and more fierce market competition may make the development environment for companies more severe," added Zhang Liqun, a CFLP analyst.