Non-manufacturing PMI hits 3-month high
Updated: 2012-12-04 04:07
By Chen Jia (China Daily)
As a result of the recovery in manufacturing output and an increase in investment supported by policy easing, the country's economic growth may speed up to 8 percent in the fourth quarter this year from a more-than-three-year low of 7.4 percent in the third quarter, according to economists.
The higher service and manufacturing PMI readings support financial services company Barclays PLC's view that "year-on-year industrial production and GDP will increase moderately in the fourth quarter".
Cai Jin, vice-chairman of the China Federation of Logistics and Purchasing, said domestic demand is playing a greater role in driving the economy.
China's economic development is likely to rebound in 2013 and grow at a rate of 7.5 percent — the same rate it is expected to show this year — or even faster, a deputy central bank governor said on Sunday.
It is very possible the consumer price index, a gauge of inflation, will be 4 percent for next year, Yi Gang, deputy governor of the People's Bank of China, said during a forum in Beijing.
Consumer inflation for all of 2012 could be as low as 2.7 percent, which would be a "pretty good" result, he said.
November's CPI will be released by the National Bureau of Statistics on Dec 9.
"The economy remains in the early stages of recovery," said Sun Junwei, an economist with HSBC.
"Despite recent better-than-expected export growth and the upside surprise in November's new export orders, the outlook for external demand remains challenging."
Sun said pressures on employment have not been reduced in a significant way.
The HSBC economist called for policy easing to continue in the rest of this year.
"Monetary policy is likely to lean on quantitative tools through open market operations and reserve requirement ratio cuts in the coming quarters," he said.
"And fiscal spending is likely to be accelerated to support infrastructure investment growth."
Inflationary pressures are now relatively low, giving the central bank space to further ease the country's monetary policies, said Liu Ligang, chief China economist with Australia and New Zealand Banking Group.
"It is possible that the People's Bank of China may cut the reserve requirement ratio once in December to inject liquidity into the market," Liu said.