Chinese factories hum at record pace

According to the HSBC/Markit Economics survey released on Thursday, Chinese manufacturing activity -- which includes measures such as output and new hires -- in the first three months of this year was the fastest since the series began in 2004.

Lu Ting, China economist at Bank of America Merrill Lynch, said manufacturers would continue to expand activity even as government stimulus measures wane.

"Officials in Beijing are just controlling investment to avoid over-heating. The rest of the economy is still strong," said Mr Lu. "The direction is clear...China is seeing a robust recovery."

Chinese activity rose to 57 in March from 55.8 in February. A reading above 50 signals an expansion, while one below that threshold represents a contraction.

Qu Hongbin, China chief economist at HSBC, said the robust PMI numbers and export growth suggested that the Chinese economy would grow at an annualized rate of 11 per cent in the first quarter this year.

"With inflation pressures rapidly accumulating, this increases the risk of interest rate hikes in the coming months", Mr Qu said.

Last month, Wen Jiabao, the Chinese premier, warned about the risk of inflation in China, linking it to the future of the Communist party. Mr Wen said China would maintain "pro-active fiscal policy and moderately easy monetary policy" while implementing "strict controls" over new infrastructure investment.

Chinese factories hum at record pace

According to the HSBC/Markit Economics survey released on Thursday, Chinese manufacturing activity -- which includes measures such as output and new hires -- in the first three months of this year was the fastest since the series began in 2004.

Lu Ting, China economist at Bank of America Merrill Lynch, said manufacturers would continue to expand activity even as government stimulus measures wane.

"Officials in Beijing are just controlling investment to avoid over-heating. The rest of the economy is still strong," said Mr Lu. "The direction is clear...China is seeing a robust recovery."

Chinese activity rose to 57 in March from 55.8 in February. A reading above 50 signals an expansion, while one below that threshold represents a contraction.

Qu Hongbin, China chief economist at HSBC, said the robust PMI numbers and export growth suggested that the Chinese economy would grow at an annualized rate of 11 per cent in the first quarter this year.

"With inflation pressures rapidly accumulating, this increases the risk of interest rate hikes in the coming months", Mr Qu said.

Last month, Wen Jiabao, the Chinese premier, warned about the risk of inflation in China, linking it to the future of the Communist party. Mr Wen said China would maintain "pro-active fiscal policy and moderately easy monetary policy" while implementing "strict controls" over new infrastructure investment.

Chinese factories hum at record pace

According to the HSBC/Markit Economics survey released on Thursday, Chinese manufacturing activity -- which includes measures such as output and new hires -- in the first three months of this year was the fastest since the series began in 2004.

Lu Ting, China economist at Bank of America Merrill Lynch, said manufacturers would continue to expand activity even as government stimulus measures wane.

"Officials in Beijing are just controlling investment to avoid over-heating. The rest of the economy is still strong," said Mr Lu. "The direction is clear...China is seeing a robust recovery."

Chinese activity rose to 57 in March from 55.8 in February. A reading above 50 signals an expansion, while one below that threshold represents a contraction.

Qu Hongbin, China chief economist at HSBC, said the robust PMI numbers and export growth suggested that the Chinese economy would grow at an annualized rate of 11 per cent in the first quarter this year.

"With inflation pressures rapidly accumulating, this increases the risk of interest rate hikes in the coming months", Mr Qu said.

Last month, Wen Jiabao, the Chinese premier, warned about the risk of inflation in China, linking it to the future of the Communist party. Mr Wen said China would maintain "pro-active fiscal policy and moderately easy monetary policy" while implementing "strict controls" over new infrastructure investment.

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