Industrial output is up according to partial figures. However, experts disagree on future trends. Some believe that economic expansion will continue; others call for a change in direction.

Beijing (AsiaNews/Agencies) – Manufacturing in China grew at a faster pace in August after the weakest performance since early 2009. Some analysts believe the economy is stabilising and that growth will continue; others think that unless the country changes development model the pace of expansion would slow down.

According to data released by the logistics federation and the National Bureau of Statistics, which covers more than 820 companies in 20 industries, the Purchasing Managers Index (PMI) rose half a point to 51.7 since July. The 50-point mark separates contraction from expansion.

A separate PMI released by the Hong Kong and Shanghai Banking Corporation HSBC saw the PMI rise to 51.9 from 49.4.

“China’s economic activity is decelerating, albeit gradually, on the way to realizing a soft landing,” Shen Jianguang, an economist at Mizuho in Hong Kong, told Bloomberg. “Investment and production are decelerating less than feared.”

Other analysts hope domestic demand will rise and compensate for lower exports. China’s passenger-car sales rose 59 per cent in August from a year earlier, more than three times July’s pace.

However, not everyone agrees. Other experts note that the economies of the European Union and the United States, China’s two largest markets, are growing below expectations and this could further impact Chinese exports.

In fact, economic expansion in China, the world’s biggest metals user, will slow to as low as an annual 6 per cent pace this decade after a three-decade run of 10 per cent on average, according to Rio Tinto Group.

Nevertheless, the “small rebound in August PMI indicated that China’s economy won’t see a steep correction,” said Zhang Liqun, a researcher at the State Council’s Development and Research Centre. “Attention needs to be paid to the large rebound in the input price index, which may create pressure on companies’ costs.”

For many analysts, China saw major wage hikes this year, at a time when real inflation appears to be growing faster than official forecast with possibly negative impact on domestic demand.

For this reason, many of them insist that China should move away from its current development model, which relies heavily on exports, in favour of domestic consumption instead.

• china
• economy
• expansion
• wages
• inflation
• development
• model
• investments