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Published on : Jul 24, 2014

According to a survey conducted by HSBC, the manufacturing activity in China has seen the fastest growth in the past 18 months ending July 2014. This is a sign that the country’s economy is now stabilizing.

The purchasing manager’s index or PMI, which is a measuring unit for the sector’s growth, showed a rise of 52 in July as compared to 50.7 in June. A mark above 50 means expansion and it has remained so in two consequent months.

This growth is a result of various ‘mini-stimulus’ measures taken by China to give a fillip to its economy.

In early July China stated that its economy experienced an expansion of 7.5% in the second quarter of 2014, as compared to 7.4% a year ago.

The retail sales too saw a jump of 12.4% year-on-year. This shows that the domestic demand is growing.

As an additional impetus to the China’s economy, Beijing intends to cut taxes on small firms and expedite the railway line construction. The Central Bank too intends to lower the reserve requirement ratio (RRR) for banks that lend to the agro businesses and other small firms to enable more lending.

The government has also encouraged banks to lend money to export business in order to boost shipments.