China manufacturing growth speeds up

Factory activity in China grew at its fastest pace in more than two years in July; indicating that the country’s economy may be stabilising.

The official PMI (purchasing manager’s index) rose from 51 in June, to 51.7, the National Bureau of Statistics said.

The PMI is an important gauge of the sector’s health and a reading above 50 indicates expansion.

The data comes after China has taken a series of steps in recent months to help boost its economic growth; including cutting taxes on small firms and speeding up the construction of railway lines across the country.

The official PMI, which measures activity in bigger factories, follows another PMI survey by HSBC in July which measured activity in relatively smaller factories in China. The results of which gave a preliminary reading of 52 – an 18-month high.

In July Chinas reported that its economy expanded by 7.5%, in the April-to-June quarter, from a year ago, and up from 7.4% growth in the previous three months.

Other data released in recent weeks has shown a jump in factory output, fixed asset investment and retail sales.