Beijing: China`s manufacturing index hit a six-month high in May, with production picking up and demand increasing, official data showed Monday, boding well for the world`s second-largest economy that is stuck in a slowdown.
The official Purchasing Managers` Index (PMI) released by the National Bureau of Statistics (NBS) came in at 50.2 for May, the strongest since 50.3 in November and the third consecutive month of expansion.
The index, which tracks activity in factories and workshops, is seen as a key barometer of the country`s economic health. A figure above 50 signals growth, while anything below indicates contraction.
The sub-index of production increased to 52.9 last month, up 0.3 percentage points from April, while that for new orders rose by 0.4 percentage points to 50.6, suggesting that "demand for manufacturing continued to expand", the NBS said in a statement.
But the indicators for employment and raw material inventory remained below the break-even point, it added.
China`s gross domestic product expanded 7.4 percent last year, the slowest since 1990. Growth weakened further to 7.0 percent in the January-March period, the worst quarterly result in six years.
The frailty looks to have extended into the current second quarter after indicators for April such as trade and industrial output came in weaker than expected.
Authorities have taken a series of steps to stimulate the economy, including three interest rate cuts since November and two reductions in the amount of cash banks must keep in reserve, in a bid to boost lending.
