A gauge of China’s manufacturing showed a third month of expansion, adding evidence that the recovery in the world’s second-biggest economy will extend into the new year.
The Purchasing Managers’ Index was 50.6 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That compares with the 51.0 median estimate in a Bloomberg News survey of 27 analysts and 50.6 in November. A reading above 50 indicates expansion.
Today’s report, along with a separate manufacturing gauge yesterday showing the fastest expansion in 19 months, reflect increased infrastructure spending that’s helping drive a rebound from a seven-quarter slowdown as a new generation of Communist Party leaders takes the nation’s reins. Li Keqiang, set to succeed Wen Jiabao as premier in March, is championing urbanization to put economic growth on a more sustainable path.
There’s little doubt that China’s economy will rebound in the first half of 2013,” Joy Yang, chief Greater China economist at Mirae Asset Securities (HK) Ltd. in Hong Kong, said before the release. “As a developing country, China has the luxury of boosting infrastructure investment to cushion cyclical headwinds.”
The final December reading of a purchasing managers’ index released yesterday by HSBC Holdings Plc and Markit Economics was 51.5, the highest in 19 months, after a 50.9 preliminary reading and a final 50.5 in November. The HSBC index focuses more on smaller businesses.
The nation’s budget deficit may widen to 1.2 trillion yuan ($193 billion) in 2013, including the sale of 350 billion yuan of bonds to fund local governments, Bloomberg reported on Dec. 27, citing a person who asked not to be identified because the deliberations are not public. A bigger gap may help pay for tax cuts and measures to boost urbanization and consumer demand.
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