China's Purchasing Managers' Index (PMI) for December rose by a full point from November, jumping to 51.5 from 50.5, signalling "a modest improvement of operating conditions in the Chinese manufacturing sector," according to a press release from HSBC (NYSE: HSBC ) and Markit Economics.
Marks above 50 equal expansion, while numbers below that signify contraction.
December's mark is the highest in 19 months for the world's second-largest economy. According to the HSBC figures, the one-point surge is also the fastest growth in 21 months for China, which has had to deal with a slowing economy recently. However, improving exports and the latest PMI figure -- along with a report last week that Chinese industrial profits have surged 20% year-over-year -- indicate to some that China's slowdown may be a temporary phenomenon.
The press release also took special note that:
- Output expanded at the quickest rate since March 2011.
- Total new orders rose despite a slight fall in new export orders.
- Purchasing activity increased at the fastest pace in 21 months.
In October, the World Bank cut its forecast for full-year Chinese economic growth to 7.7%. Even the organization's earlier estimate of 8.2% was far lower than 2011's growth, when China's economy expanded by 9.2%.