China factory sector activity hits 71-month high in December, PMI shows
Activity in China´s factories picked up to its fastest pace since January 2013 at the end of the year as new orders from domestic clients piled up, leading to sharp price pressures.
Caixin´s China manufacturing sector purchasing managers´ index rose from 50.9 in November to 51.9 for December, outpacing economists´ forecasts for an improvement to 50.7.
The data chimed with the results of the 'official' PMIs released on 1 January, with showed the manufacturing sector PMI had edged down from 51.7 in the month before to 51.4, which was nevertheless near a 2012 high. In parallel, the non-manufacturing PMI slipped from 54.7 to 54.5.
A number of panellists spoke of stronger underlying demand and new client wins, Caixin said.
The rate of new order book expansion was at its strongest since July 2014.
"Data indicated that improved domestic demand was the key driver of new business growth, however, as new export sales were unchanged in December," the survey compiler said in a statement.
The rate of input price inflation increased at its sharpest since early 2011 amid reports of higher raw material costs, which prompted firms to raise their selling prices at a marked rate.
Commenting on the China General Manufacturing PMI data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: “The Chinese manufacturing economy continued to improve in December, with the majority of sub-indices looking optimistic.
"However, it is still to be seen if the stabilization of the economy is consolidated due to uncertainties in whether restocking and
consumer price rises can be sustainable.”
Also over the past weekend, four Chinese officials told Bloomberg that Beijing was to step up its monitoring of how residents made use of the quotas assigned to them to purchase foreign currency.
On 30 December, the People´s Bank of China tightened reporting requirements on cross-border transactions for the country´s lenders in an effort to lessen money laundering.