Chinese manufacturing activity grew at its fastest pace in nearly two years in August, according to an official survey announced yesterday, in a possible sign that the world’s No. 2 economy is steadying thanks to government stimulus.
The Chinese Federation of Logistics & Purchasing’s monthly “purchasing managers index” rose to a 22-month high of 50.4 last month from 49.9 in July.
The survey, which focuses on China’s large state-owned enterprises, uses a 100-point scale with numbers below the 50-point mark indicating contraction.
Separately, the private Caixin/Markit survey, which is based mainly on small, privately owned companies, eased to 50.0 last month from 50.6 the month before. It was still the index’s second highest level since 2014, analysts noted.
Data on China’s outsized manufacturing sector are closely watched for insights on the state of the broader economy, which expanded at a steady 6.7 percent pace in the three months ending in June. That’s the slowest pace of growth since the 2008 global financial crisis, despite repeated stimulus efforts.
“The two manufacturing gauges again pointed to different directions in August. But on a moving average basis, both indicators suggest that economic activity is still improving, supported by fiscal expansion,” said HSBC China economist Julia Wang.
Weak global demand for Chinese-made clothing, toys and electronics has complicated efforts by communist leaders to support trade and prevent job losses in export industries. Kelvin Chan, Hong Kong, AP
Zinc, lead and tin rise to post-2015 high
Zinc, lead and tin climbed to the highest in more than a year after China’s official factory gauge unexpectedly rose last month, signaling improved demand from the world’s top metal user.
Zinc for delivery in three months rose as much as 1.2 percent to USD2,338.50 a metric ton on the London Metal Exchange, the highest since May 2015. It traded at $2,328.50 by 10:46 a.m. local time.
The metal for immediate delivery settled Wednesday at a $8.75 a ton premium to the benchmark contract, the widest backwardation since May 2015.
Lead and tin gained more than 0.8 percent and touched highs not seen in the past year.
Copper also advanced after workers at a Codelco mine in northern Chile rejected a wage offer, raising the prospect of supply disruptions in the biggest copper-producing nation. MDT/Bloomberg
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