"The Chinese manufacturing sector strengthened further in November, with overall business conditions improving at the strongest pace in eight months. This was signalled by the headline HSBC Purchasing Managers’ IndexTM (PMITM) posting 55.3, up from 54.8 in October. Considerable price pressures were also indicated by November’s survey, with both output and input prices rising at substantial and accelerated rates."
A read above 50 means the Chinese manufacturing sector is growing. Under 50 means contracting. Price pressures were expected as consumer prices in China rose 4.4% in October, a 25 month high. Also read: China 'set to tighten monetary policy' (BBC News 12/3/2010). In a similar fashion, the official China PMI reported by the "China Federation of Logistics & Purchasing and National Bureau of Statistics" hit 55.2 in November, up from 54.7 in October. See the chart and data at Bloomberg.com - CPMINDX.
Albert Edwards, a Societe Generale strategist who is bearish on emerging markets, put out a report with a chart showing a steep divergence between the China OECD Leading Indicator and the Thomson Reuters Commodity Price Index (CCI or former CRB). See the chart at Business Insider.
"The last time China's leading indicator was this weak, the commodity bubble was about to burst" (the commodity index is testing the 2008 high).
I seeked out the OECD data for China at http://stats.oecd.org/Index.aspx?datasetcode=MEI_CLI and the trend has been down since February 2010 (September 2010 was the last month reported). Does something need to give here? And how will "prudent" management of monetary policy affect China's growth in 2011. (BBC).
OECD - China Leading Indicators Composite