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China home prices rise for third month in February
by Staff Writers
Shanghai (AFP) March 1, 2013

China manufacturing expansion slows in February
Beijing (AFP) March 1, 2013 - Manufacturing activity in China expanded at its slowest rate in five months in February, official data showed Friday, but maintained the economic recovery despite the Chinese New Year holiday.

The official purchasing managers' index (PMI) was 50.1 in February, the lowest since September when it stood at 49.8, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing (CFLP).

The figure was seasonally adjusted, they said, to mitigate volatility led by the week-long Lunar New Year holiday that fell in the middle of the month.

PMI is a widely watched barometer of the health of China's economy, with a reading above 50 indicating expansion while anything below points to contraction.

Zhang Liqun, a government analyst, said that the February PMI figures showed a rebound in the world's second-largest economy was likely to lose steam and stabilise in the coming months.

"The February PMI extended a trend seen in January to decline modestly, indicating a rebound in economic growth will come to a stabilising point," Zhang said in a separate statement released by the CFLP.

British bank HSBC said Friday that its final PMI for February was 50.4, unchanged from its preliminary reading and a four-month low.

But it was also the fourth consecutive month of expansion after 12 months of contraction, according to the bank's figures.

"China's recovery continues on improving domestic demand conditions and the labour market," said Qu Hongbin, a Hong Kong-based economist with HSBC, in a statement.

"The pace of ongoing recovery is mild, implying no need for the People's Bank of China to tighten policy any time soon."

Compared with the official report, the bank's survey, compiled by information services provider Markit and released by HSBC, focuses more on smaller enterprises.

China's economy expanded 7.8 percent last year, its slowest pace in 13 years, in the face of weakness at home and in key overseas markets.

The latest official figures show Chinese banks more than doubled their lending in January from December, granting 1.07 trillion yuan ($171.7 billion) worth of new loans, as Beijing seeks to boost growth.

Home prices in China rose year-on-year in February for the third consecutive month, an independent survey showed Friday, citing strong credit growth as a key factor.

New home costs in 100 major cities jumped 2.48 percent from a year earlier to an average 9,893 yuan ($1,589) per square metre last month, the China Index Academy said, following rises of 1.2 percent in January and 0.03 percent in December.

Prices rose 0.83 percent month-on-month, the ninth consecutive monthly increase, the organisation said in a statement.

"The housing ministry's support of demand for housing upgrades since late last year and the evident growth in new bank loans resulted in optimistic sentiment," it said.

But it noted a "tightening trend" on property policy, as some cities tightened rules on housing funds that help people buy homes and banks cut back quotas for mortgages.

Property costs are a key social issue in China, where millions of would-be buyers have been priced out of the market, fuelling resentment.

The central government reiterated its tough stance over the regulation of the sector last month, pledging to strictly implement earlier control measures and expand property taxes.

Possible further tightening and fewer launches of new home sales in February due to the Lunar New Year holiday kept prices in some cities from rising too fast, the academy said.

The average home price in Beijing stood at 25,290 yuan per square metre in February, up 0.86 percent month-on-month, slowing from a 2.27 percent monthly rise in January.

In Shanghai, prices averaged 28,022 yuan per square metre, up 1.33 percent month-on-month, compared with a 2.3 percent gain in January.

China has sought to control residential property prices for the past three years, with measures including restrictions on second and third home purchases, higher minimum downpayments, and taxes in some cities on multiple and non-locally-owned homes.

New properties are the most important part of China's real estate market and the survey covers prices of both houses and apartments, including flats with prices regulated by the authorities.

The academy is owned by SouFun Holdings, China's biggest real estate website operator.

Data is collected every month by on-the-spot surveys and through reports by estate agents, property developers and officials.


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