SHANGHAI - China's manufacturing improved slightly in September, for a second month of gains, with domestic demand helping to offset weakness in the export sector, according to a survey released Saturday.
The China Federation of Logistics and Purchasing, an industry group, said its monthly purchasing managers index rose 0.3 points from the month before to 51.2, showing activity expanding slightly. Figures above 50 show expansion, and below contraction.
The survey followed a similar one released Friday by HSBC that, at 49.9, showed little change from August, suggesting still sluggish growth in demand.
But both suggest the economy remains stable, with scant signs of a major slowdown that could sap growth in other countries that rely on Chinese industries to drive demand for iron ore, factory machinery and other goods.
Efforts to curb inflation by tightening controls on bank lending have raised worries that China's planners might overshoot their goal and slow the economy too much, especially if conditions in Europe and the U.S. deteriorate further.
A preliminary version of the HSBC purchasing managers index, which showed a sharper weakening than the final figure, prompted a sell-off in global markets as investors reacted to the possibility that China's robust growth might falter.
The latest results "should provide some support to global investor confidence, if only at the margin," said Alistair Thornton of IHS Global Insight. "It is clear that despite the policy-driven slowdown and weakening external climate, there remains significant momentum in the economy."
Europe's prolonged debt crisis and sluggishness in the U.S. economy have prompted many analysts to revise growth forecasts for China downward. Most forecasts, however, put growth at a still dynamic rate of between 8 per cent and 9 per cent.
"The domestic economy is now in good shape, but from an international point of view, the global manufacturing index has been declining since March," the report by the Federation of Logistics noted.
It said most areas showed only modest improvement, and warned of a need to remain on guard against inflation, which moderated to 6.2 per cent in August after hitting a three-year high of 6.5 per cent in July.
The report said the survey's results show slowing growth in the raw materials and energy industries and stable progress in consumer goods industries. Strong advances in machinery and electrical equipment and information technology suggest efforts to restructure the economy and develop those more advanced industries are succeeding, it said.