Zhang Lingun
China’s official purchasing managers’ index (PMI) for January rose to 45.3 from 41.2 in December. That is according to the China Federation of Logistics and Purchasing (CFLP) coming up from a record low of 38.8 in November.
A reading over 50 indicates an expansion of activity in the manufacturing sector while one below 50 suggests contraction.
New orders, including those for exports, and production rose strongly. The only two sub-indexes to decrease were stockpiles of finished products and employment.
Zhang Liqun, a government economist, said the survey pointed to a recovery in the economy this quarter.
In a statement to the China Federation of Logistics and Purchasing Zhang Liqun said, ‘The January PMI indicates that China’s economy is gradually bottoming out.’ He said the government’s RMB4 trillion ($585 billion) stimulus plan had started to have a positive impact on business, which was booking more orders for capital goods.
Moreover, banks extended about RMB1.2 trillion ($175 billion) in new loans in January, a monthly record.
The China Securities Journal reported that this is in response to government calls to lend more to halt the economy’s decline.
Central bank governor Zhou Xiaochuan added in published remarks, that China’s pump-priming has had an initial positive impact, although the overall state of the economy still needs monitoring. Bank lending grew sharply last month, while the year-on-year rate of industrial production growth edged up after several months of steep declines.
Zhou Xiaochuan told Financial News, the mouthpiece of the People’s Bank of China as reported in CNBC ,
‘According to the economic figures for December, the domestic stimulus policies have achieved initial results.’
Zhou’s comments on the economy were similar to those of Premier Wen Jiabao, who said in Britain at the weekend that he had seen signs of a revival in the Chinese economy and logistics could be first sign of spring
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