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China manufacturing index up

August 1, 2014

Manufacturing activity in the world's second largest economy has picked up considerably in recent months, reaching a new high in July. Analysts viewed the latest figures as proof of China's continued reform drive.

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Chinese factory workers
Image: Reuters

In July, Chinese manufacturing rose at its fastest pace in more than two years, climbing to a 27-month peak, the National Bureau of Statistics said in a statement on Friday.

The country's official Purchasing Managers Index hit 51.7 last month, up from 51.0 in the previous month and the highest level recorded since April 2012.

"We're optimistic about China's economic outlook in the remainder of this year as the growth momentum is picking up, while inflation remains mild," ANZ Bank economists Liu Li-Gang and Zhou Hao said in a joint note.

Shift of focus

Analysts said the increase in manufacturing activity was in no small way a result of a series of measures introduced by Beijing to bolster growth, including tax breaks for small and medium-sized enterprises and incentives to encourage lending in rural areas.

Earlier this year, Chinese authorities set the country's annual growth target for this year at about 7.5 percent which would match last year's GDP expansion.

Leaders in Beijing have been trying to shift their economic model away from over-reliance on large, state-subsidized investment to one which would see the country's increasingly wealthy consumers play a pivotal role in propelling economic growth.

hg/ng (AFP, dpa)