China economy picking up but US growth at weak pace

BEIJING — China’s factory activity expanded at its fastest pace in 18 months in July as new orders surged, a preliminary HSBC survey showed yesterday, the latest indication that the economy is picking up as government stimulus measures kick in.

The HSBC/Markit Flash China Manufacturing Purchasing Managers’ Index rose to 52 in July from June’s 50.7, the highest since January last year. It was also the second consecutive month the figure has been above the 50-point level that separates growth from contraction.

“Economic activity continues to improve in July, suggesting that the cumulative impact of mini-stimulus measures introduced earlier is still filtering through,” said Mr Qu Hongbin, chief economist for China at HSBC. “We expect policy makers to maintain their accommodative stance over the next few months to consolidate the recovery.”

Meanwhile, the International Monetary Fund said United States economic growth this year will likely be at the weakest pace since the Great Recession ended, mostly because of a sharp, weather-related contraction in the first quarter. But it added that growth resumed in the April-June quarter and will remain healthy in the second half of this year and next.

In its annual report on the US economy, the IMF projected growth at 1.7 per cent this year, down from a 2 per cent estimate last month. That is below last year’s 1.9 per cent and would be the slowest rate since the recession ended in June 2009.

But the IMF also said growth will rebound in the April-June quarter to a healthy 3 to 3.5 per cent and remain in that range for the rest of this year. It also projects the economy will expand 3 per cent next year, which would be the best showing since 2005. Agencies