China's manufacturing activity grew for a ninth straight month in November amid heavy stimulus spending but the growth rate was unchanged from October, an industry group reported Tuesday.
The state-sanctioned China Federation of Logistics and Purchasing said its monthly purchasing managers index, or PMI, stood at 55.2 on a 100-point scale. Numbers above 50 show manufacturing activity expanding.
"The November PMI is level with the previous month, possibly indicating the economic boom is starting to stabilize after reaching a fairly high level," a government economist, Zhang Liqun said in a statement issued by federation.
Beijing's 4 trillion yuan ($586 billion) stimulus has helped to boost growth by pumping money into the economy through spending on public works projects. Economic growth rose to 8.9 percent over a year earlier in the quarter ending in September and the World Bank is forecasting 8.4 percent growth for the full year.
The government plans to shift emphasis to encouraging private investment and consumer spending in the second year of the stimulus, Chinese leaders said in a statement last week following an annual planning meeting.
Economists see the PMI as a more effective measure of future economic activity than gross domestic product because it contains forward-looking information such as new orders.
The November index for employment fell 1.3 points to 51.1, indicating more jobs were created but at a slower rate than in October, according to the federation. Exports grew but that index slipped 0.9 points to 53.6.
The government and business groups have warned that stimulus spending might be worsening chaotic overinvestment in industries such as steel and cement where supply already exceeds demand.
Officials said last month the government has rejected 47 proposed industrial projects worth a total of 191 billion yuan ($28 billion) since September in the steel, petrochemical, nonferrous metals, power generation and other fields.
The PMI survey is cosponsored by Hong Kong trading company Li & Fung Ltd.
On the Net:
China Federation of Logistics and Purchasing (in Chinese): http://www.chinawuliu.com.cn