The pace of manufacturing growth in China was unchanged to open the second quarter of the year even after the government raised interest rates and allowed the yuan to appreciate more rapidly to control inflation, according to Bloomberg. On Friday, HSBC Holdings and Markit Economics reported that the purchasing managers’ index for China was at 51.8 in April, which is unchanged from the prior month to remain at a level above the 50-point marker for growth. The gain came even as the yuan reached 6.5 per United States dollar for the first time since 1993.
For Qu Hongbin of HSBC, the data “confirmed the picture of steady growth across the manufacturing sector” on the heels of the People’s Bank of China increasing interest rates on Apr. 5. The annual rate of consumer price inflation was 5.4% in March, and along with robust growth data, the HSBC economist said he expects “a continuation of Beijing’s tightening efforts in the coming months.” The World Bank increased its inflation estimate to 5%, and the next round of tightening could come as soon as May 2, according to Credit Suisse Group.