Activity in China's factories expanded at a faster rate in December, according to a private gauge that offered a conflicting signal of economic activity in the world's second-largest economy.
The Caixin China manufacturing purchasing managers' index rose to 51.5 in December from 50.8 in November, Caixin Media Co. and research firm Markit said Tuesday. The result was the highest since August. A result above 50 indicates an expansion in manufacturing activity while a result below that indicates a contraction.
Subindexes of production and new orders showed faster growth in December, Caixin said.
"Manufacturing operating conditions improved in December, reinforcing the notion that economic growth has stabilized in 2017 and has even performed better than expected," Zhengsheng Zhong, an economist at CEBM Group, said in a statement accompanying Tuesday's release.
Economists expect growth to have slowed at the end of the year as Beijing continues to reduce excess production capacity, impose environmental curbs on output and rein in frothy market activity.
"However, we should not underestimate downward pressure on growth next year due to tightening monetary policy and strengthening oversight on local government financing," said Mr. Zhong.
The improved reading contrasts with China's official manufacturing PMI, a competing official gauge, which fell to 51.6 in December from 51.8 in November, according to data released by the National Bureau of Statistics on Sunday.
The Caixin China Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives at more than 400 manufacturing companies. Compared with the official gauge's coverage of firms including large state-owned companies, the Caixin PMI tends to track small, private manufacturers more closely.
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(END) Dow Jones Newswires
January 01, 2018 21:17 ET (02:17 GMT)