BEIJING (REUTERS, BLOOMBERG) - Growth in China's manufacturing sector in May kept pace with the previous month, an official survey showed on Wednesday (May 31), beating expectations in a reassuring sign the world's second-biggest economy is not losing too much steam after a solid first quarter performance.
The official Purchasing Managers' Index (PMI) stood at 51.2 in May, compared with the previous month's 51.2 and above the 50-point mark that separates growth from contraction on a monthly basis. Non-manufacturing PMI rose to 54.5. Numbers higher than 50 indicate improving conditions.
While some early indicators for May suggested a slowdown in growth is taking hold, the PMI data signal continuing momentum that gives policy makers more room to rein financial risks.
While economists forecast growth will meet or exceed the government's target of at least 6.5 per cent this year, projections also point to a continued slowdown after the first quarter's surprise acceleration to a 6.9 per cent pace.
"Financial deleveraging that's ongoing has been carefully targeted not to have a large impact on the broader real economy," said Mr Rob Subbaraman, chief economist for Asia ex-Japan at Nomura Holdings in Singapore. "Overall macro policy settings, particularly fiscal, remain stimulatory."
Mr Tommy Xie, an economist at OCBC Bank in Singapore, said: "The global economy will continue to recover and that'll bolster Chinese manufacturers."