China’s economy is strengthening after a two-quarter slowdown, with a manufacturing gauge rising to a 16-month high in August as new orders jumped and overseas demand rebounded.
The Purchasing Managers’ Index was at 51.0, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing. HSBC Holdings Plc and Markit Economics will today release the final reading of their gauge after a preliminary figure on Aug. 22 showed the biggest gain in three years.
Improvement in manufacturing may bolster confidence that the economy is responding to Premier Li Keqiang’s policies to support growth amid a crackdown on shadow banking aimed at curbing financial risks. JPMorgan Chase & Co. yesterday joined Deutsche Bank AG and Credit Suisse Group AG in raising estimates for an increase in gross domestic product, citing strength in infrastructure and real-estate, and a pickup in exports.
“The recovery is being driven primarily by domestic demand but international demand is picking up too as we can see from the jump in new export orders,” said Lu Ting, head of Greater China economics at Bank of America Corp. in Hong Kong. “This will surely boost markets’ confidence in China’s recovery amid the turmoil in some emerging markets.”
The Shanghai Composite Index (SHCOMP) rose 2 percent last week, the biggest gain since March. The yuan completed its second straight monthly advance in August on optimism the economy is picking up.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.