Flash PMI rise in October signals factory rebound in China

A preliminary China purchasing manager’s index indicated that manufacturing activity may rise in October after three months of contraction, Reuters reported. HSBC’s flash PMI for China increased to 51.1%, up from 49.9% in September, based on stronger factory orders, including export orders. The demarcation between contraction and expansion is 50%.  The Hong Kong Stock Exchange rose 4% in response to the data. HSBC economist Qu Hongbin said the PMI also reflected easing inflation, with stable output prices and lower input price rises. George Worthington, chief Asia Pacific economist at IFR Markets, said that the index indicates strong domestic demand that may keep economic growth near 9% in spite of a looming crisis in Europe. Annual growth slowed to 9.1% in the third quarter, compared to 9.5% in the second quarter.