China's manufacturing activity rebounds in Oct.

China's manufacturing activity rebounded in October after shrinking for three consecutive months, a British bank said Monday, indicating a hard landing is less likely for the world's No. 2 economy. In a monthly report, HSBC Ltd. said its flash purchasing managers index (PMI) for China's manufacturing sector came to 51.1 for October, up from 49.4 in September. The PMI measures the health of a country's manufacturing sector. A reading of 50 or above represents an expansion of the sector compared to the previous month while a reading lower than 50 represents a contraction. The index was below the benchmark of 50 from July to September. HSBC said the rebound back into an expansionary zone was driven largely by improvements in new orders, output and exports. "Today's flash PMI results confirms the strength of China's manufacturing growth despite the lagged impact of policy tightening and early signs of slowing external demand," said Qu Hongbin, the chief China economist at HSBC. "Coupled with targeted easing for small companies, this implies that stable labor market conditions and steady industry production growth should continue in the coming months." Qu said resilient domestic demand is sufficient to support around 8.5-9 percent growth in the coming quarters, with the country becoming less dependent on exports. HSBC expected that the Chinese authorities will maintain a stable monetary policy for a while, as inflationary pressures are still high, although they are slowing easing. To curb the country's persisting inflation, the central People's Bank of China (PBOC) has raised the benchmark interest rate three times this year while increasing the amount of money banks must keep in reserve six times.