China August official factory PMI rises to 51.7; beats expectations

[BEIJING] Growth in China's manufacturing sector unexpectedly accelerated in August, defying expectations that the world's second-largest economy will start to cool as borrowing costs rise and regulators clamp down on riskier lending.

The official Purchasing Managers' Index (PMI) released on Thursday stood at 51.7 in August, the China Logistics Information Center said on its website.

That was up from the previous month's 51.4 and well above the 50-point mark that separates growth from contraction on a monthly basis.

Analysts surveyed by Reuters had forecast the reading would come in at 51.3, easing only marginally from July.

China posted stronger-than-expected economic growth of 6.9 per cent in the first half, fuelled by a year-long construction boom, resurgent exports and robust retail sales.

But softer July data reinforced views that growth will slow slightly in the second half due to higher financing costs, numerous regulatory clampdowns and signs of moderation in the red-hot housing market.

REUTERS