China's factories show strength

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The Independent Online

Activity at Chinese factories gathered pace last month, defying seasonal trends and lifting the mood across world markets last night.

Data for October showed that two surveys of the country's manufacturing sector had climbed to six-month highs. The official purchasing managers' index (PMI), which tends to ease as factory production slows during October's week-long National Day holiday, rose to 54.7 from 53.8 in September.

"The fact that the PMI went up despite this seasonal bias suggests real activity growth was likely to have been exceedingly strong in October," Goldman Sachs economists said.

The official figures were supplemented by data from HSBC, whose Chinese PMI also rose, climbing to 54.8 from 52.9. There was evidence of strong demand in the world's second largest economy, with the sub-index for new orders soaring to 58.1 from 54.4 in September.