Chinese manufacturing output jumps to 2-year high

<p>China’s manufacturing output has soared to a two-year high, according to HSBC.</p>

China's manufacturing activity has soared to a two-year high, which could be a sign that the government's steps to boost growth are making an impact.

HSBC's purchasing managers' index (PMI) preliminary reading for factory output in January rose to 51.9 in comparison to December's 51.5.

The PMI system works in such a way that levels higher than 50 indicate expansion in a sector, while those lower than this benchmark represent contraction.

Chief China economist at the bank Qu Hongbin said: "Despite the still tepid external demand, the domestic-driven restocking process is likely to add steam to China's ongoing recovery in the coming months."

Even though it is not the official government report on factory output, HSBC's PMI is still closely monitored by analysts, who believe the index is representative of the broad range of China's companies.

At close of play in Shanghai this morning (January 24th), the benchmark SSE Composite index retreated by 0.7 per cent to 2302.6 points.

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