China’s manufacturing improved for a third straight month in February, signaling the world’s second- biggest economy is maintaining momentum amid Europe’s debt crisis and a cooling domestic property market.
The purchasing managers’ index rose to 51.0 from 50.5 in January, China’s statistics bureau and logistics federation said in a statement today. That compares with the 50.9 median estimate in a Bloomberg News survey of 24 economists. A reading above 50 indicates expansion. Economic data in the first two months are distorted by a weeklong Chinese New Year holiday.
Today’s data and larger-than-forecast production increases in Japan and South Korea yesterday add to signs that global growth prospects are improving as the U.S. recovery strengthens and Europe works to contain its debt crisis. Stocks in China gained 5.9 percent last month and Asia’s benchmark index entered a bull market yesterday, led by gains in China Shipping Container Lines Co.
“China’s overall growth momentum is stable and domestic economic activity is quite resilient,” Lu Ting, a Hong Kong- based economist with Bank of America Corp., said before the release. “Liquidity conditions have turned better due to policy fine-tuning and new loans could rebound this month.”
The federation’s index is based on a survey of managers at more than 800 companies in 28 industries.
China’s gross domestic product expanded 8.9 percent in the fourth quarter of 2011, slowing from a 9.1 percent gain in the previous three months, as the government waged a campaign to tame gains in consumer and housing prices.
The nation’s exports and imports fell for the first time in more than two years in January, while new lending was the lowest for a January in five years. Housing prices last month failed to rise in any of 70 cities monitored by the government, a statistics bureau report showed.
Slowing overseas sales and Premier Wen Jiabao’s pledge to maintain curbs on the property market may see growth drop to 7.5 percent this quarter, according to Nomura Holdings Inc. That would be the least since the global financial crisis.
In contrast, Lu Ting at Bank of America expects first- quarter expansion of 8.6 percent.
Wen said economic-policy fine-tuning needs to begin this quarter, the official Xinhua News Agency reported on Feb. 12.
Economists combine data for the first two months to smooth distortions caused by the timing of the weeklong Lunar New Year holiday. The festival fell in January this year and February last year.
--Zheng Lifei. With assistance from Ailing Tan in Singapore, Regina Tan and Huang Zhe in Beijing. Editors: Nerys Avery, Scott Lanman