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China manufacturing rises for 4th straight month

China manufacturing rises for 4th straight month

April 1st, 2012 in News

SHANGHAI (AP) - Chinese manufacturing gained momentum for a fourth straight month in March, helped by a recovery in the auto, tobacco and electronics sectors.

The state-affiliated China Federation of Logistics and Purchasing said Sunday that its purchasing managers index, or PMI, rose 2.1 points to 53.1 in March, up from February's 51.0 and January's 50.5. A reading above 50 signifies expansion.

The rise in new factory orders suggests a recovery in various sectors, though federation analyst Zhang Liqun said there were still worrying signs of weakness in exports, investment and consumer demand.

China often sees an uptick in manufacturing and construction in the spring, following the annual Lunar New Year holidays and a national legislative session in March.

"So it is important not to view this as a sign of out-and-out strength," IHS Global Insight's Alistair Thornton said in an analysis Sunday. "Nonetheless, de facto credit easing has clearly buoyed sentiment and should lay the foundation for a better second half. At the very least, things are not getting worse."

Beijing faces a challenge in keeping growth from stalling while avoiding an inflationary rebound, he said.

China's economic growth declined to 8.9 percent in the final quarter of last year after Beijing hiked interest rates and tightened other controls to cool inflation. Chinese leaders reversed course in December and promised more bank lending to help companies cope with the slump in global demand, but changes have been gradual.