China’s manufacturing unexpectedly expanded last month on increased new orders, suggesting the world’s second-biggest economy is withstanding Europe’s debt crisis and a government-induced property slowdown at home.
The purchasing managers’ index rose to 50.5 from 50.3 in December, China’s statistics bureau and logistics federation said in a statement today. That compares with a median estimate of 49.6 in a Bloomberg News survey of 17 economists. A reading above 50 indicates an expansion.
The data may back Premier Wen Jiabao’s caution in further easing policies to sustain growth even as the International Monetary Fund warns that the euro area’s crisis could trigger another global recession. Wen reiterated yesterday the government will continue its curbs on the property market and fine-tune economic policies as needed.
‘‘The economy will hit a soft patch in the first quarter as the euro area is sliding into recession and the domestic property correction is accelerating,’’ Ding Shuang, a Hong Kong- based economist at Citigroup, said before the data release. ‘‘The PMI may stay weak until policy easing reduces the risk of a hard landing.’’
The new orders gauge of the PMI expanded in January for the first time in three months, today’s data showed. Output also rose at a faster pace, according to the statement.
Home prices have declined in cities from Beijing to Wenzhou as the government cracks down on speculation and implements a program to build low-cost housing.
China’s economy grew 8.9 per cent in the final three months of 2011, the least in 10 quarters, as exports rose at a slower pace and property curbs hurt output of products including steel and cement. Expansion may slide to about 7.5 per cent this quarter and 7.6 per cent in the three months through June until policies to spur growth kick in, according to Nomura Holdings.
The government has so far refrained from following Asian nations including Thailand in lowering benchmark interest rates and held off in a cut in bank reserve requirements that Industrial Bank and Barclays Capital Asia had forecast for January.
Instead, the People’s Bank of China has added cash to the financial system through reverse-repurchase operations. The money-market rate in January had its biggest monthly drop since July after the central bank added the most funds in almost four years.
The IMF last week cut its 2012 growth forecast for the nation to 8.2 per cent from an earlier estimate of 9 per cent.
