China March PMIs rebound, domestic demand shines

Mon Apr 1, 2013 4:45am EDT
 
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By Koh Gui Qing

BEIJING (Reuters) - Stronger domestic demand helped China's factory activity to rebound in March, with new orders up sharply in a sign that the underlying economic recovery is strong enough to weather any risks from patchy export performance, surveys showed on Monday.

China's official manufacturing purchasing managers' index (PMI) released by the National Bureau of Statistics rose to an 11-month high of 50.9 in March, above the 50-point level that indicates growth on the month, but below a Reuters poll consensus forecast of 52.0.

A separate survey by HSBC showed its final PMI climbing to 51.6 last month, roughly in line with a flash reading of 51.7 and up from February's 50.4.

"Growth momentum has been stabilizing, but headwinds remain," Liu Li Gang and Zhou Hao, economists at ANZ, said in a note to clients. "The current economic rebound remains fragile, and could falter with tightened monetary policy conditions."

The twin PMI surveys suggest the speed of revival in the world's No. 2 economy may not be as brisk as some think, as unsteady foreign demand for Chinese exports remained a constraint.

Most analysts expect China's economy to enjoy a steady but gentle recovery this year, driven internally by infrastructure investment and household consumption, after growth struck 13-year lows in 2012 due to crumbling demand for Chinese exports.

ELSEWHERE IN ASIA

Similar trends were evident elsewhere in North Asia. The HSBC/Markit survey of purchasing managers showed manufacturing activity in South Korea at its strongest rate in a year as new export orders picked up, suggesting beginnings of a recovery.   Continued...

 
An employee works at a steel factory that exports to Europe and America in Jiaxing, Zhejiang province, February 28, 2013. REUTERS/William Hong