The Chinese economy is expected to pick up pace this quarter on the back of the fastest expansion in the manufacturing sector in the past one and a half year. A never before seen growth in new loans and the government’s $586 billion stimulus are the major contributors to keeping the Chinese recovery on track.
According to the Federation of Logistics and Purchasing, the Purchasing Managers’ Index was up to 55.2 in October from 54.3 in September. The import index increased from 50.7 to 52.8 showing signs of an increase in the domestic demand. An output index went up to 59.3 from 58 last month as new orders were on the rise.
The Chinese economy, the third largest in the world, is likely to grow at an annual pace of 9.5 percent this quarter. Increasing sales in the auto sector, on the back of subsidies and tax cuts, have been instrumental in providing the necessary impetus to the manufacturing sector.
Experts believe that the growing external demand will provide additional help towards economic growth and that the growth in the Chinese GDP would be better than the expected value of 8 percent annually.
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