China's manufacturing rises again in January

China's manufacturing activity continued to improve in January, official figures showed Wednesday, despite weaker demand for exports amid global economic turmoil. The official purchasing managers index (PMI) rose to 50.5 in January, up slightly from 50.3 in December, the China Federation of Logistics and Purchasing said in a statement. Manufacturing continued to expand for the second month, after contracting for the first time in 33 months in November, when the PMI stood at 49. A reading above 50 indicates the sector is expanding while a reading below 50 suggests a contraction. The improvement came despite mounting evidence that China's overall economy is slowing as Europe's sovereign debt crisis and weakness in the United States hit the world's second-largest economy. "China's process of economic contraction is gradually stabilising," Zhang Liqun, a researcher at government think-tank the Development Research Centre, said in the statement. China's economy grew 9.2 percent last year, well down from 10.4 percent growth in 2010, and most forecasts put this year's expansion at between 8.0 percent and 8.5 percent. But Zhang warned that slowing export growth could spell trouble for China's economy later this year. New export orders fell to 46.9 in January, down from 48.6 last month, according to the official data released Wednesday. "Changes in external factors may impact the economy, requiring close attention," he said. Still, analysts said the latest reading showed China's economy was headed for a "soft landing". "This reading is quite supportive of our soft landing call," Bank of America-Merrill Lynch said in a research report. "We believe the growth momentum is stable in China." The market had expected PMI to return to contraction in January with a forecast of 49.5, according to a poll by Dow Jones Newswires. But a separate PMI measure for China released by British banking giant HSBC has departed from the official reading. HSBC's preliminary PMI stood at 48.8 in January, up only marginally from 48.7 in December, as China's manufacturing activity contracted for the third straight month.