Chinese manufacturing expands in July

[August 01, 2009]  BEIJING (AP) -- China's manufacturing expanded in July, a state-sanctioned index showed Saturday, as Beijing's massive stimulus spending helped boost growth in the world's third-largest economy.

The China Federation of Logistics and Purchasing said its purchasing managers index rose 0.1 points from June to 53.3 on a 100-point scale where numbers above 50 show activity expanding.

It was the fifth month in a row that the index has expanded. The National Bureau of Statistics compiles the index using data collected from purchasing and supply managers at more than 700 firms.

Stimulus spending and an investment boom financed by a surge in lending by Chinese state banks helped to boost second-quarter economic growth to 7.9 percent from a year earlier, up from 6.1 percent the previous quarter. But Beijing has cautioned that a full-fledged recovery is not firmly established.

Dong Tao, an economist at Credit Suisse, said in a research note that the figures do not have any significant impact on policy but show that China's economy is improving steadily, and the government is unlikely to tighten the supply of money before concerns over jobs and social stability lessen.

The new business orders index was unchanged at 55.5, and new export orders index rose 0.7 percentage points to 52.1.

New orders for infrastructure machinery were down slightly in the index, Tao said, indicating that infrastructure investment may have leveled off while investment in property construction is on the rise.

[Associated Press]

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