China PMI survey shows growth reviving, but uneven

Sun Dec 2, 2012 3:59pm EST
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By Lucy Hornby

BEIJING (Reuters) - China's economy resumed momentum in November, but there are still signs of over-reliance on growth from the inefficient state sector, a series of purchasing managers' surveys shows.

The official manufacturing purchasing managers' index (PMI) rose to a 7-month high of 50.6 in November from 50.2 in October, the National Bureau of Statistics (NBS) said on Saturday, following on a preliminary private sector survey that showed factory activity reviving to a 13-month high.

The weekend results came ahead of the release on Monday of the statistics bureau's survey of the non-manufacturing sector, and by HSBC's final PMI reading for last month.

While growth accelerated for large firms for a third straight month, medium and smaller companies saw a retrenchment, with the decline more pronounced for smaller firms, the NBS said.

"Much activity is emanating from the state sector, with infrastructure projects driving growth. In China's relatively closed economic system, this means that activity levels can be sustained," wrote Xianfang Ren and Alistair Thornton of IHS Global Insight.

"Whilst we feel that the economy has been stabilized through the short-term, we feel that the manner in which activity has been revived will retard China's economic reform agenda and make the transition onto a sustainable footing all the more tricky."

The headline PMI figure is in line with a poll of economists by Reuters, and confirms a trend toward recovering growth in the world's second-largest economy.

STEADY GROWTH   Continued...