Chinese manufacturing expands again...

I lot of doomsayers made a lot about the sub-50 Chinese PMIs. No more:

China's manufacturing activity rebounded in December, the official Xinhua News Agency said, with the economy showing some resilience despite strife in its key European and US export markets.

The purchasing managers index (PMI) reached 50.3 in December, the China Federation of Logistics and Purchasing was quoted as saying.

A reading above 50 indicates the sector is expanding, while a reading below 50 suggests a contraction.

Manufacturing returned to expansion last month after contracting for the first time in 33 months in November, when the PMI fell to 49, down 1.4 points from October.

The market had expected the index to remain steady at 49 in December, according to a poll by Dow Jones Newswires.

In an attempt to boost growth and counter turmoil in Europe and the United States, China recently cut the amount of money that banks must hold in reserve for the first time in three years.

Beijing is anxious to prevent a sharp slowdown in the economy but also wants to avoid reigniting inflation, which hit a more than three-year high of 6.5 per cent in July but has since slowed.