Manufacturing on a roll in China

BEIJING - China's manufacturing growth held at the fastest pace in 18 months in November, aiding the rebound of the world's third-biggest economy.

The Purchasing Managers' Index was unchanged at a seasonally adjusted 55.2.

Premier Wen Jiabao called for China and Europe to maintain the intensity of stimulus measures as the global economy starts to recover.

The Government is on alert for inflation and asset bubbles after an unprecedented US$1.3 trillion of new loans in the first 10 months of 2009 drove a rebound from the nation's weakest growth in almost a decade.

"The recovery is quite strong, with all economic indicators except exports now pretty much back to pre-crisis levels," said Isaac Meng, a senior economist at BNP Paribas in Beijing.

"The key challenge is how to cool off excessive liquidity and pre-empt the asset bubble and inflation risks."

The Shanghai Composite Index has advanced 15 per cent this quarter. Yesterday's figure compares with a record-low 38.8 a year earlier, when recession sent export orders plunging.

The Communist Party's Politburo said last week that the nation would stick next year with the monetary and fiscal policies adopted in 2008 to counter the effects of the global financial crisis.

- BLOOMBERG