China Manufacturing Expands a Fourth Month, PMI Shows   (Category: Financial News) July 1 (Bloomberg) edited -- China’s manufacturing expanded for a fourth month as a 4 trillion yuan ($585 billion) stimulus plan and record bank lending revive the world’s third-largest economy. The official Purchasing Managers’ Index rose to a seasonally adjusted 53.2 in June from 53.1 in May, the Federation of Logistics and Purchasing said today in Beijing in an e-mailed statement. A reading above 50 indicates an expansion. The Shanghai Composite Index rose above 3000 points for the first time in a year, copper gained and the yen fell as the report added to signs that the global economy may be over the worst of its slump. China’s economy may keep improving in the third and fourth quarters, enabling the nation to meet its 8 percent economic growth target for this year, central bank Governor Zhou Xiaochuan said this week. “China’s recovery is gathering further momentum,â€� said Lu Ting, an economist with Bank of America Merrill Lynch in Hong Kong. “It has been recovering faster than the market had expected.â€� An export-order index rose to 51.4 in June from 50.1 in May, expanding for a second month, the government-backed PMI showed. “Fiscal stimulus projects are gathering steam and everything is going according to plan,â€� said Sherman Chan, an economist with Moody’s Economy.com in Sydney. “The pickup in export orders is the most encouraging sign for an economy that’s been very externally dependent.â€� Output and employment indexes climbed, the survey showed. Input prices jumped as raw-material costs rose. In China, the stimulus plan and new loans of 5.84 trillion yuan in the first five months, almost triple lending a year earlier, are driving growth. “China’s stimulus program is having a demonstrable effect on domestic spending, which has resulted in increased manufacturing activity,â€� said Jing Ulrich, Hong Kong-based chairwoman of China equities at JPMorgan Chase & Co. Bank of America Merrill Lynch and JPMorgan raised this week their forecasts for second-quarter economic growth. The former expects 7.6 percent, compared with 7.2 percent previously. JPMorgan increased its forecast to 6.9 percent from 6 percent. Prices of copper, used for autos and construction, have climbed more than 60 percent this year as Chinese buyers boost imports to records to replenish stockpiles. Higher coking coal prices are adding to evidence that demand for steel is recovering. China’s lending boom sparked a 32.9 percent surge in urban fixed-asset investment in the first five months, the fastest growth in five years. New loans in June may exceed 1 trillion yuan, triple lending in the same month a year earlier, China Business News reported June 30. Back   Print this article