Oct. 1 (Bloomberg) -- A Chinese manufacturing index advanced for the second month in September, driven by an increase in new export orders.
The Purchasing Managers’ Index was at 51.2, compared with 50.9 in August, the China Federation of Logistics and Purchasing said in a statement today. The median estimate in a Bloomberg News survey of 13 economists was for a reading of 51.1. A level above 50 indicates expansion.
Today’s report suggests the world’s second-largest economy is maintaining momentum amid a campaign by Premier Wen Jiabao to cool inflation that’s included higher interest rates, lending curbs and home-purchase limits. Heightened risks of recession in the U.S. and euro area economies may hurt export growth and limit the scope for further tightening even as the government remains focused on stabilizing prices.
“It’s very clear that growth will slow down,” said Shen Jianguang, chief Greater China economist for Mizuho Securities Asia Ltd. “That’s actually what is desired by the government as it wants to control inflation,” said, Shen, who has worked for institutions including the International Monetary Fund and European Central Bank.
The manufacturing index compiled by the logistics federation and National Bureau of Statistics is based on a survey of purchasing managers in more than 820 companies in 20 industries.
The federation’s PMI hasn’t fallen below 50 since February 2009. In contrast, a separate manufacturing index released yesterday by HSBC Holdings Plc and Markit Economics indicated a third straight month of contraction.
HSBC’s index, which reflects a survey of more than 400 companies, is weighted toward small businesses that have been hit harder by the government’s tightening measures, according to economists including Bank of America Corp.’s Lu Ting and Australia and New Zealand Banking Group Ltd.’s Liu Li-Gang. The official PMI, compiled from questions to more than 800 companies in 20 industries, has a greater focus on larger enterprises, they say.
China’s benchmark Shanghai Composite Index fell to its lowest close since April 2009 yesterday on concerns that the nation’s growth is slowing while Greece may default on its debt. The gauge sank 15 percent in the July-to-September period, the biggest loss since the second quarter of 2010.
--Victoria Ruan. With assistance from Marco Lui in Hong Kong, Jessica Zhou, Mike Forsythe in Beijing. Editor: Ken McCallum, John Liu
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