Manufacturing, economic growth in China

Posted Nov 2nd 2009 8:40AM by Tom Johansmeyer
Filed under: China, Economic Data, Financial Crisis

Export orders were on the rise in October in China, suggesting a strengthening recovery and an opportunity to cut back on stimulus spending. The manufacturing measure grew at its fastest rate in the past year and a half, according to the HSBC (NYSE: HBC) purchasing managers' index. It increased to a seasonally adjusted 55.4 from 55 in September.

If you're looking for a reason behind the gain, it's all in the flow of capital. In addition to the government's economic stimulus package, $1.27 trillion in new loans were written to help deliver the country from the global financial crisis.

Now, according to a report by Goldman Sachs (NYSE: GS), the country may tighten monetary policy, since consumer prices are increasing. China, the world's third largest economy, could grow 9.5% year-over-year, making it the greatest gain (and third straight) since the second quarter of 2008.

What's starting in China is growing legs around the world.

In the Eurozone, manufacturing activity is up for the first time in 17 months, and the Institute for Supply Management in the United States is expected to announce today that its index grew from 52.6 in September to 53 in October -- reaching its highest level since 2006.

Tags: economic recovery, economic stimulus, EconomicRecovery, EconomicStimulus, eurozone, goldman sachs, GoldmanSachs, gs, hbc, hsbc, institute for supply management, InstituteForSupplyManagement, inthenews