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Friday, March 31, 2017, 17:25

China's manufacturing activity expands in March

By Agencies

BEIJING - Activity in China's manufacturing sector expanded at the fastest pace in nearly 5 years in March, adding to evidence that the world's second-largest economy has gained momentum early this year, an official survey showed on Friday.

The official Purchasing Managers' Index (PMI) rose to 51.8 in March from the previous month's 51.6, National Bureau of Statistics (NBS) data showed and was well above the 50-point mark that separates growth from contraction on a monthly basis.

The reading was the highest since April 2012.

A reading above 50 indicates expansion, while a reading below reflects contraction.

At the same time, China's service sector continued to expand, nearing a three-year record high in March

At the same time, China's service sector continued to expand, nearing a three-year record high in March, official data showed Friday.

"High-tech manufacturing continued its rapid expansion, and some traditional manufacturing industries' production and management conditions continue to be on the mend," said NBS senior statistician Zhao Qinghe.

The non-manufacturing purchasing managers' index came in at 55.1 in March, up from 54.2 in February, according to NBS.

The official manufacturing PMI also expanded to 51.8 in March, NBS data showed.

The services sector accounted for over half of China's economy last year and for the majority of its 6.7 percent growth as rising wages give Chinese consumers the opportunity to shop, travel and eat out more.

"The Chinese economy has staged a strong start, which has laid a solid foundation for the whole year," said Bi Jiyao, deputy director of the Academy of Macroeconomic Research.

Friday's surveys came as Brexit and the U.S. central banks' recent interest rate hike kept global appetite for risk in check.

China has reported a slew of upbeat data so far in 2017. A surprise rebound in home sales and stronger infrastructure investment have added fresh impetus to a months-long construction boom that has lifted demand for building materials from cement to steel and helped reflate prices of industrial commodities worldwide.

Recent industrial profit data showed combined earnings rose almost 32 percent in the first two months of the year from a year ago, the highest in nearly six years.

But fresh government curbs to further cool the property market in recent weeks are expected to dampen housing demand and prices eventually.

More than a dozen Chinese cities have tightened restrictions on home purchases so far this month to deter speculation.

The southern boomtown of Guangzhou became the latest to put fresh curbs on homeowners in recent days to discourage "flipping", selling properties quickly after purchasing them to make a quick buck.

FACTORY OUTPUT ACCELERATING, SERVICES STRONG

Adding to signs of a global manufacturing recovery, China's factory output accelerated in March, with the sub-index rising to 54.2 from 53.7 in February.

Total new orders also showed improvement, rising to 53.3 from February's 53. New export orders ticked higher to 51.0, suggesting much of the demand surge was domestic,

Highlighting the strength of the building boom, a measure of the construction industry stood at 60.5, compared to 60.1 in February.

Manufacturers stopped shedding jobs, with the employment sub-index rising to the no-change mark of 50, compared to 49.7 in February.

A steadier currency so far this year may also have aided business confidence, after the yuan fell 6.5 percent against the U.S. dollar last year.

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