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China manufacturing activity grows most in 2 years

(Bloomberg)
Updated: 2007-05-01 17:04

Power Shortages

Central bank Governor Zhou Xiaochuan is trying to curb asset bubbles, accelerating inflation and excessive factory investment that may lead to overcapacity and energy shortages.

China may face a fourth summer of power shortages as accelerating production strains oil and coal supplies, the National Development and Reform Commission, the top economic planning body, said April 26.

Inflation reached a more than two-year high of 3.3 percent in March. China's benchmark CSI 300 share index gained the most of 90 global stock benchmarks tracked by Bloomberg in April, rising 28 percent.

The Purchasing Managers' Index is based on a survey of more than 700 companies in 20 industries including oil and gas, oil refining, metallurgy, transport equipment and electronics. A reading above 50 reflects an expansion in business activity and a reading below 50 indicates a contraction.

The survey tracks changes in output, new orders, export orders, employment, inventories, input prices and raw-material prices. The data is seasonally adjusted.

The China Federation of Logistics and Purchasing jointly releases the index with the statistics bureau.