China's manufacturing activity expanded at a slower pace in December, according to a government survey of purchasing managers released yesterday.

 

The Purchasing Managers' Index (PMI) fell to 55.3 last month from 55.4 in November, the statistics bureau said in an e-mailed statement. A reading above 50 indicates expansion.

 

China is trying to cool investment to curb environmental damage and the risk of bad loans and idle factories should demand for exports slow. The government last month raised borrowing costs to a nine-year high and pledged a "tight" monetary policy.

 

The figure for December showed "a normal seasonal fluctuation," said Zhang Liqun, a researcher at the State Council Development & Research Center in Beijing. China's investment and economic growth quickened in October and November, and the PMI has not yet reflected those changes, he said.

 

Of 20 industries surveyed, 18, including transport equipment manufacturers, garment producers and general equipment makers, scored more than 50, the report showed, according to Bloomberg News.

 

The Purchasing Price Index fell for the first time in five months to 69 after climbing to a two-year high of 70.1 in November, the report said.

 

The PMI is based on a survey of more than 700 firms in 20 industries. The survey tracks changes in output, new orders, export orders, employment, inventories, input prices and raw-material prices. The data is seasonally adjusted.

 

(Shanghai Daily January 2, 2008)