China's manufacturing activity grew at a relatively rapid clip in January and producer prices rose sharply despite Beijing's recent efforts to curb booming bank lending, two industry surveys showed, reported Dow Jones.
The reports prompted worries that China's policy makers could further tighten money controls.
The HSBC China Manufacturing Purchasing Managers Index rose to a record high of 57.4 in January from 56.1 in December, marking the fourth straight month that the index's reading has risen. Businesses reported more orders at home and abroad. A PMI level above 50, indicates growth in manufacturing from the previous month, while a reading below 50 indicates activity is falling.
A separate index, issued by the China Federation of Logistics and Purchasing and the National Bureau of Statistics, was 55.8 in January, indicating the 11th straight month of manufacturing growth. Though the index fell from 56.6 in December, it was the second-highest level since activity began to slow in May 2008 amid the global recession.
Analysts said Monday's China index figures showed that investor concerns were overdone. "Worries about tightening and a sudden slowdown are certainly exaggerated," said Royal Bank of Scotland economist Ben Simpfendorfer. "The economy will continue to grow robustly in the first half of this year."
At the same time, the numbers showed growing upward pressure on prices that could reinforce official concerns about potential inflation. The companies polled for both indexes said that input costs rose in January, with HSBC cautioning that input price inflation was the strongest since July 2008.
Businesses also reported receiving more export orders last month. The new-export orders sub-index of the government-backed PMI rose to 53.2 in January from 52.6 in December, while the sub-index in the HSBC index rose at a near-record rate.
