China's manufacturing sector sustained growth at Multi-month highs in January's a private business survey showed on Thursday, as factories continue to raise output to meet new orders, suggesting resilience in the world's second- largest economy.
The Caixin/Markit manufacuturing Purchasing Manager's index (PMI) was at 51.5 in January, unchanged from the previous month.
Analysts surveyed by December's reading was the highest in four months and above the 50-point mark that separates growth from contraction.
Growth in factory output quickened to a 13 month high in January, and employment fell at its slowest pace in nearly three years.
The solid Caixin PMI readings could help reassure international investors that china's economy is still expanding at a healthy clip as it nututes new drivers of growth.
The China economy slowed slightly in the second half of last year from the first half amid a government crackdown on air pollution,a cooling property market and higher borrowing costs.
Analysts expect some softening in economic expansion early this year after a forecast-beating 6.9 percent growth in 2017, the first annual acceleration in seven years.
An official survey released on wednesday on manufacturing activity in January pointed to a slight loss of momentum.
The yuan rose nearly 7 percent against the dollar in 2017, and is up another 3.5 percent this year to its strongest level since August 2015- when the people's Bank of china (PBOC) stunned markets with a 2 percent devaluation.
still, china posted strong export growth last year, thanks not only to improving demand globally but efforts to diversify its markets beyond the United States. That push has seen policymakers put a greater emphasis on assessing the yuan's value against a basket of currencies of its trading partners.
"it's obvious that they are pegging (the yuan) directly to the basket, " said a source close to the central bank who declined to be identified due to the sensitivity of the matter.
On such a trade-weighted basis, the yuan has been remarkably steady, limiting the net impact on China's exports. China's CFETS RMB index was flat last year and has inched up only 1 percent so far this year.
but if other currencies in the basket were to fall relatively more against the dollar than the yuan, that could lift the trade-weighted value and cause some headaches
"we want to absorb all factors that influence the yuan, not just the dollar as long as there are no big imbalances, we will not use the exchange rate to adjust trade," said a second source.
The source are involved in internal policy discussions but are not part of the final decision-making process. The PBOC did not respond to Reuters' request for comment.
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