A Chinese manufacturing gauge recovered lost ground in January, suggesting stimulus measures have helped stabilize the world's second-largest economy.
The preliminary Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics was at 49.8, exceeding the median estimate of 49.5 in a Bloomberg survey and up from December's 49.6. Numbers below 50 indicate contraction.
China's gross domestic product increased 7.4 percent in 2014, the slowest full-year pace in 24 years. Along with data this week showing industrial output and retail sales improved in December, the first reading of the economy's momentum in January may alleviate concerns of a deeper downturn.
"The gain likely reflects positive impact from monetary easing," said Dariusz Kowalczyk, an economist at Credit Agricole CIB in Hong Kong. "The manufacturing PMI reading suggests that industrial output will continue to expand at a solid pace in coming months."
The Shanghai Composite Index was 0.6 percent higher at 10:05 a.m. local time.
China will avoid a hard landing and is focused on ensuring long-term medium-to-fast growth, Premier Li Keqiang told global leaders in Davos this week. In a panel discussion in the Swiss town, the central bank governor said a moderation in growth is "good news" if it results in a more sustainable expansion.
Readings on output and new orders improved in January, the PMI report showed. Today's reading, known as the Flash PMI, is based on 85 percent to 90 percent of responses to surveys sent to more than 420 manufacturers.
The central bank cut interest rates for the first time in two years in November and the government accelerated the approval of infrastructure projects to boost an economy mired in a property slump and overcapacity. Robust external demand fueled by the U.S. recovery has helped underpin growth as the economy transitions away from investment-led expansion.
To contact Bloomberg News staff for this story: Xiaoqing Pi in Beijing at xpi1@bloomberg.net
To contact the editors responsible for this story: Stephanie Phang at sphang@bloomberg.net; Malcolm Scott at mscott23@bloomberg.net Malcolm Scott
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