China shows signs of economy boost with increased manufacturing activity.
An initial survey by HSBC has revealed that the manufacturing activity in China has grown at its fastest pace in 18 months in July, 2014. This latest survey will calm serious concerns about China’s destabilizing economy that were doing the rounds in the economic circuit.
The bank’s purchasing managers’ index (PMI) – an indicator of the sector’s health – climbed up to 52 in July, from 50.7 in June.
If the reading goes above 50 then it indicates progress and this is the second consecutive month in which HSBC’s PMI has been above 50 point benchmark. In recent times, China has been making earnest efforts to improve the economic health of the country.
The chief economist for China at HSBC, Qu Hongbin said, “that the cumulative impact of mini-stimulus measures introduced earlier is still filtering through.”
The official PMI of China for the month of July, 2014 will be released in early August, 2014.
In early July, 2014 China had reported a growth of 7.5 % in the April-June quarter a year back which was up by 7.4% growth in the previous three months.
The capital city of Beijing has announced plans to cut taxes small firms and increase the speed of construction of railway lines across the country. China’s Central bank has also lowered the reserve requirement ratio – which is the amount the bank needs to keep in reserve. All these moves are expected to further stimulate the country’s economic growth.
Photo Credits: CTV