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Chinese Manufacturing Snaps Out Of Slowdown

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China's manufacturing economy staged a moderate rebound in August after slowing for several months under the onslaught of government measures to rein in credit and deter property speculation.

Despite encouraging signs of stabilisation in a pair of business surveys released on Wednesday, analysts cautioned that the robust domestic economy would have to battle the headwinds of soft external demand, especially from the United States.

"This reconfirms our long-held view that China is moderating rather than melting down," said Qu Hongbin, chief economist for China at HSBC.

He was commenting on a rise in the bank's purchasing managers' index (PMI) to a three-month high of 51.9 in August from 49.4 in July. A PMI produced by the China Federation of Logistics and Purchasing (CFLP) also rose, to 51.7 from 51.2.

Investors cheered the news. MSCI's index of Asia Pacific stocks outside Japan rose 1.9 percent .MIAPJ0000PUS, while metals prices got a lift in anticipation of stronger Chinese demand.

"After the run of weak data from the United States through August, the Chinese numbers were a breath of life for the start of the new month," a metals dealer in Perth said. <MET/L>

The increase in the official PMI was close to the median forecast of 51.8 in a Reuters poll.

A figure above 50 denotes expansion; a reading below 50 indicates that business has contracted from the month before.

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  • 415 Brexit, House prices and Summer 2020

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      • down 5% +
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