PMI continues to innovate high manufacturing recovery

New Express News December 2009 China Manufacturing Purchasing Manager index (PMI) released. After a brief stabilisation last month, December 2009 PMI was 56.6%, up 1.4% from last month, to a 20-month high, according to data released 1st by the China Logistics and Purchasing Federation (CFLP). At this point, the index has been maintained for 10 months above 50%, China's economic rebound has been basically solid, and a further increase in the trend.　　However, the rise in the price of resource products has also led to an increase in inflation expectations. According to the various indices, only the new export orders index fell by 1% in December 2009 compared with last month; The stock index of raw materials was flat;　　Among them, production index, New Order index, purchase quantity index and purchase price index rose Obviously, the increase was above 2%, reached more than 60%. It is understood that the new Order index and production index have continued to climb since the rally to more than 50% last February. The former reached 61% in December, while the latter rose to 61.4%.　　Analysts at Barclays Capital's China Economic Research Institute said it all showed a sustained recovery in manufacturing and would continue to be strong for 2010 years. But Yu, Goldman Sachs Asia's macro economist, also raised fears of a possible surplus in China's real economic growth, while seeing a strong rise in PMI. He said the 2006 and 2007 PMI average was only 54.5% and 55%, but the corresponding real GDP growth was as high as 11.9% and 13% respectively.　　The sharp rise in the December 2009 PMI bodes well for real GDP growth at the end of 2009, which is no longer good news, when inflationary pressures are clearly rising sharply. HSBC PMI, a former CLSA PMI, also released yesterday, according to its statistics that the data for December 2009 was 56.1%, the highest since September 2007. Qu Hongbin, HSBC's China chief economist, also said inflationary pressures were looming as manufacturing led the Chinese economy to a sustained recovery. As demand is booming and raw material costs are rising faster, the price index of nearly two months of finished products accelerates, exacerbating inflationary pressures. But he expects inflation to remain manageable over the next few months.