Chinese freight volume in October rose at the highest pace since June, and two key manufacturing indices show production last month increased at the sharpest pace in at least six months, as the country’s economy strenghens ahead of Chinese New Year festivities.
Freight transported via railways, highways, inland waterways and aircraft rose 12.3 percent year-over-year in October to 3.6 billion tons. In October, railway traffic slipped 3.2 percent to 325 millions tons, highway freight jumped 15.2 percent to 29 billions tons, waterway cargo rose 6.9 percent to 403 million tons, and air cargo dropped 3 percent to 456,200 tons.
Chinese factory production in November hit the highest level in seven months, as the manufacturing purchasing manager index rose 0.4 percentage points to 50.6, according to the China Federation of Logistics and Purchasing, the government-sanctioned index. A reading above 50 signals indicates expansion of production.
HSBC‘s Flash China Manufacturing PMI in November hit a 13-month high, rising to 50.4 from 49.5 in October. Manufacturing output is expected to rise in the coming weeks ahead of the Chinese New Year, when factories halt or slow production during the February celebration.
China is still “in the early stage of recovery, and global economic growth remains fragile,” said Qu Hongbin, HSBC chief China economist. “This calls for continuation of policy easing to strengthen the recovery.”
The jump in Chinese manufacturing output helped lift global production, wiith JP Morgan Manufacturing PMI's rising to a five-month high in November. The increase on the index to 50 ended a four-month slump of manufacturing contraction. Global manufacturing new order shrank for the sixth straight month in November, but the rate of contraction was slight, according to the index.
"New export business fell for the eighth month in a row, as growth in China and a stabilization in the U.S. were offset by declines in Europe and Japan," according to a JP Morgan report.