Jan. 3, 2007 (China Knowledge) – China’s purchasing manager’s index (PMI), which is complied by brokerage house CLSA, fell to 52.4 in December from 53.0 in November.

However, this indicator of the manufacturing sector, one of China’s economic pillars is still expanding, as a reading above 50 indicates growth in purchasing while a reading below 50 represents a contraction.

In a statement, CLSA chief economist Jim Walker said that while the concern about China’s economy overheating would have eased with this latest reading of the PMI, Beijing was leaning towards further tightening and was carefully monitoring inflation pressures, especially wages.

CLSA noted that the much of the sales growth came from the domestic market, with the export orders index rising slightly to 51.1 in December from 49.6 in November.