Manufacturing in China hit a five-month high in September as production and new orders rose, according to an independent survey published Wednesday. The HSBC China Manufacturing PMI, or purchasing managers index, rose to 52.9 up from 51.9 last month.
A reading above 50 means the sector is expanding, while below 50 indicates a decline. "A pick up in new orders means that domestic demand is still strong," said Qu Hongbin, chief economist at HSBC in Hong Kong. China's economy grew at 10.3 percent year-on-year in the second quarter compared with a blistering 11.9 percent in the first three months as government efforts to rein in soaring property prices started to bite.
"Despite uncertainties on growth in global demand, we expect China to rely on continued investment in ongoing infrastructure projects and resilient consumption to grow by around 9 percent in the rest of the year and 2011," Qu said. Analysts warned the manufacturing sector would face weaker demand in major export markets in the second half as the United States struggles to recover from the global recession and Europe deals with its debt crisis. HSBC's results are based on interviews with purchasing managers at more than 400 companies.
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