HSBC: China manufacturing hits 5 month high

Manufacturing activity in China hit a five-month high in October, lifted by a pick-up in output and orders despite the global economic turmoil, HSBC said Monday. The preliminary HSBC purchasing managers' index (PMI) stood at 51.1 in October, up from 49.9 in September, the British banking giant said in a statement. A reading above 50 indicates the sector is expanding, while a reading below 50 suggests a contraction. The final PMI reading for October is due to be released November 1. HSBC chief economist Qu Hongbin said the latest data indicated China's economy was not headed for a hard landing, despite slowing export growth and tight credit conditions aimed at curbing inflation. "Thanks to the pick-up in new orders and output... PMI rebounded back into expansionary territory during October, marking a steady start to manufacturing activities in the fourth quarter," he said in the statement. The PMI figures also showed a slowing in input prices, a measure of the cost of raw materials, he said, showing government steps to rein in high inflation might be making an impact. China's benchmark consumer price index rose 6.1 percent year-on-year in September, slowing only marginally from a 6.2 percent rise in August but retreating from a more than three-year high of 6.5 percent in July. China's economic growth slowed to 9.1 percent in the third quarter from 9.5 percent in the second quarter as government efforts to tame inflation and economic turbulence in Europe and the United States curbed activity.