China's Manufacturing Sector Posts Moderate Gains in December
China's manufacturing sector posted moderate growth in December, breaching by hairline the index's point of contraction, according to new official purchasing managers' index issued by the country's National Bureau of Statistics.
Gathered in cooperation of the China Federation of Logistics and Purchasing, the new data showed that the country's manufacturing activity merely jumped to 50.3 in the last month of 2011, coming from the 49 recorded in the previous month.
Experts stressed that the final December index will be pegged at 49.1, making it two months in a row for the important indicators to slide, which analysts said was last observed during the first quarter of 2009.
Despite the dip, Beijing insisted that a stall is far from brewing with the Development Research Centre of the State Council asserting that no alarm bells accompany the new survey.
"The rebound in the December P.M.I. shows that there will be no big slowdown in the Chinese economy," council researcher Zhang Liqun was reported by Reuters in the official statement attached with the new index.
Amidst the signals that contradict actual growth, Liqun said that fundamentals in-placed within the Chinese economy could still fuel growth or at least abate threats of slowdowns.
The state council report called attention on numbers that actually signified recovery from November, with fresh orders sub-index moving up from 47.8 in the previous month to 49.8 in December.
The report also noted that new export sub-index increased in the same period, jumping from 45.6 in November to 48.6 in December.
Analysts, however, view the numbers as prompts for Beijing to reconsider better approach in sustaining the country's growth or in the near term, to prevent the onset of snags in the manufacturing industry that many credited for China's economic rise.
In a research note to its clients, Citibank told clients that economic weakness is now seen in China and assessment outside of the government data all suggest that problems could arise soon.
The slowdown though, analysts said, can be averted by timely and appropriate government intervention.
"Although domestic consumption held up steadily, its contribution may have been more than offset by weakened investment activity and deteriorating foreign trade conditions," Citibank was reported by Reuters as saying.
The next move expected from Beijing is to allow banks to reduce the required ratio reserve, which presently stands at 21.5 percent.
Such move, analysts said, should make available more funds that could otherwise be deployed in the system as new investments to fuel growth.