China manufacturing up in May

BEIJING, June 1 (AFP) : China's manufacturing activity strengthened to a five-month high in May, the government said Sunday, an optimistic sign amid slumping growth in the world's second-largest economy.
The official purchasing managers index (PMI) reached 50.8 in May, the National Bureau of Statistics said in a statement, up from 50.4 in March.
The index tracks manufacturing activity in China's factories and workshops and is a closely watched indicator of the health of the economy. A reading above 50 indicates growth.
The result, the third straight month of improvement, beat the median forecast of 50.6 in a survey of eight economists by Dow Jones Newswires.
A private survey published last month by British bank HSBC put China's PMI at a preliminary 49.7 in May-also a five-month high-and above April's 48.1.
China's official May result was the highest since a reading of 51.0 in December.
"The improvement of both PMIs suggest that the economic activities have stabilised somewhat due to the recent pro-growth policies", ANZ Bank economists Liu Li-Gang and Zhou Hao said in a research note.
They cited an acceleration in budgeted fiscal spending and tax rebates to help exporters announced earlier this year.
The May PMI data came after China's economic growth for the first three months of 2014 came in at its weakest pace in 18 months.
Gross domestic product grew 7.4 per cent in the first quarter from the same period the year before, weaker than the 7.7 per cent in the October-December period.
The result was the worst since a similar 7.4 per cent expansion in the third quarter of 2012.
China's leadership says it wants to make private demand the key driver for the country's economic growth, moving away from over-reliance on huge and often wasteful investment projects that have girded decades of expansion.