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China manufacturing expands for 10 months

(Xinhua)
Updated: 2010-01-01 10:09

China's manufacturing grew for 10 straight months, consolidating the recovery of the world's third largest economy, an official survey showed on Friday.

The Purchasing Managers' Index (PMI) of China's manufacturing sector stood at 56.6 percent in December, 1.4 percentage points higher than that for November, the China Federation of Logistics and Purchasing (CFLP) said.

It was the 10th straight month that the data stayed above 50, which indicated expansion. A reading below 50 signaled contraction.

The rising index suggested the Chinese economy has further consolidated its recovery, said Zhang Liqun, a researcher with the Development Research Center of the State Council.

The index for export order was 52.6 percent,?one percentage point lower than a month earlier. The purchasing price index was 66.7 percent, up more than two percentage points, the highest among other figures.

Zhang said manufacturers should enhance their competitiveness to better cope with the rising production costs.

New export order index climbed by 2.6 percentage points to 61 percent.

Only three out of the 20 surveyed sectors reported a PMI index reading below 50, which were non-ferrous metal, fiber, rubber and plastic manufacturing, as well as the tobacco industry.

The PMI index tumbled to a record low of 38.8 percent in November 2008 as the nation was hit hard by the global financial crisis.

Thanks to a massive government stimulus and record banking lending, the economy was gradually back on track and the index reading returned to above 50 in March 2009.