China manufacturing at year high
China's manufacturing is expanding at a faster pace this month, suggesting the factory recovery in the world's second-biggest economy may withstand a slowdown in exports.
The December preliminary reading was 50.9 for a purchasing managers' index released today by HSBC Holdings and Markit Economics.
This compares with the 50.8 median estimate in a Bloomberg News survey of 12 economists and a final reading of 50.5 for November, the first time in 13 months it was above the expansion-contraction dividing line of 50.
Chinese stocks had their biggest gain in three years as the report bolstered confidence in the economic recovery even as November's trade and new loans trailed estimates.
The data add to signs of a strengthening rebound including factory output and retail sales, which may smooth the transition to China's new leadership headed by Xi Jinping.
"China's ongoing growth recovery is gaining momentum mainly driven by domestic demand conditions," Qu Hongbin, chief China economist at HSBC in Hong Kong, said in a statement.
At the same time, a drop in new export orders and last month's below-forecast overseas shipments suggest "external headwinds" are persisting, Mr Qu said.
"This calls for Beijing to keep an accommodative policy stance to counter-balance the external weakness, provided inflation stays benign," he said.