Official survey shows China manufacturing at highest in 27 months after mini stimulus measures

HONG KONG—Chinese manufacturing rose to the highest level in more than two years in July in the latest sign that the world’s No. 2 economy is perking up after a series of mini-stimulus measures unleashed by authorities.

The purchasing managers’ index compiled by the China Federation of Logistics and Purchasing rose to 51.7 last month from June’s 51.0 and is at the highest level since April 2012.

A separate PMI by HSBC, also released Friday, was revised down to 51.7 from its preliminary reading of 52, but still the strongest rate of improvement in a year and half.

Both indexes are based on a 100-point scale on which numbers below 50 indicate contraction.

The surveys of China’s massive manufacturing industry indicate that the revival in the broader economy is continuing after growth ticked up to 7.5 per cent in the April-June quarter.

Communist leaders in Beijing have rolled out small-scale stimulus in the first half of the year after growth slowed to 7.4 per cent in the first quarter, as they try to keep China’s economy on track to meet their full-year growth target of 7.5 per cent.

The task is complicated by their efforts to steer China’s economy to growth based on domestic consumption rather than the trade and investment that have powered its factories.

“The economy is improving sequentially and registered across the board improvement compared to June,” HSBC’s chief China economist Qu Hongbin said. Policy makers have continued with targeted measures in recent weeks and the cumulative impact will filter through in the next few months and help “consolidate the recovery.”