China and India lead Asian economic rebound

Asia's rapid recovery from last year's recession appeared to be confirmed on Monday by a slew of positive reports on industrial production that suggested economic growth is powering steadily ahead, led by <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />China and India.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Purchasing managers' index reports for China, South Korea, Taiwan and India appeared to confirm that a robust and widespread recovery continues to be under way.

The China Manufacturing PMI, produced by HSBC and Markit Economics, rose to 56.1 in December, up from 55.7 a month earlier – the second fastest rise yet recorded by the survey, which dates back to 2004. The average rise for the fourth quarter of 2009 as a whole was also the fastest yet recorded.

The closely watched survey pointed to a ninth consecutive monthly expansion in new order volume, with companies reporting buoyant demand in both domestic and export markets. The growth in export orders was the fastest since March 2005, reinforcing a positive trend that began in the second half of last year.

The HSBC index confirmed the strong trend suggested by the official PMI numbers, released on January 1, which showed manufacturing activity expanding in December at the fastest pace for 20 months. The two series are not directly comparable because they use different methodology.

However, the HSBC date also signalled that prices charged by Chinese manufacturers were rising at the fastest rate since July 2008, buoyed by rising raw material costs as well as strong demand.