China’s manufacturing expanded in December for a ninth straight month as government stimulus spending boosted domestic demand and foreign sales rose.
The HSBC China Manufacturing PMI rose to 56.1 from November’s 55.7 on a 100-point scale where numbers above 50 show activity expanding. That is the highest level since the survey began in April 2004.
The level of new work rose at its fastest rate in four months, while producers reported “buoyant demand” from both foreign and domestic markets, the survey said. It is based on responses from some 400 companies.
“The second-round effect of stimulus measures is filtering through to substantially benefit the manufacturing sector as we expected,” HSBC’s chief China economist, Hongbin Qu, seen in our illustration, said in a statement.
The Financial Times reported economists see the PMI as a better measure of future economic activity than gross domestic product because it contains forward-looking information such as new orders.