Increased growth rates were recorded in August regarding China’s industrial production compared with the previous period since early 2009, indicating that the contraction of the economy will be limited. According to an official announcement, the Purchasing Managers’ Index rose to 51.7 from 51.2 points while on other reports held by HSBC Holdings Plc and Markit Economics showed an increase rate of in industrial output to 51.9 compared to last month’s 49.4. After the announcement of the financial data the Stock Exchange switched to a positive sign while the MSCI Asia Pacific Index of the Asian region shares increased by 0.5%.
In July, the HSBC PMI index showed its first contraction in 16 months, the government index which announced by the Federation of Logistics and Purchasing was the lowest since February 2009.
US the second largest trading partner of China after the European Union announced last week that the economy grew at a lower rate compared to the initial estimates in the second quarter. Chinese exports will be negatively affected as well by the slow growth of services and manufacturing in Europe, as governments cut spending to reduce budget deficits.
China’s GDP grew by 10.3% in the second quarter – compared to last year’s same period– which is lower than the growth of 11.9% from January to March. However, the economic development will shrink to 6% annually this decade after three consecutive decades of development with an average rate of 10%, according to estimates of the Rio Tinto Group, the third largest mining company the world as China is the biggest buyer of metal in the world.
Nevertheless, China’s demand for metal remains the stimulus for some economies, including Australia, as the government announced today that the economy grew at a faster pace than the initial forecasts in the second quarter. The GDP grew by 1.2% compared with first quarter results mainly because of the Chinese market demands for iron ore and coal.
