<div id="subtitle">Surveys show China's manufacturing continued to grow in January despite lending curbs</div><div><p>China's manufacturing expanded in January and the outlook was positive despite government efforts to cool inflation by tightening control over bank lending, two surveys showed Monday.</p><p>The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index, or PMI, edged down to 55.8 from December's 56.6 on a 100-point scale. Numbers above 50 show manufacturing activity expanding.</p><p>The index "shows the economic outlook is generally positive," the federation said in a statement.</p><p>A separate index issued by HSBC Corp. rose to 57.6 from December's 56.1, signalling what the bank called a "marked improvement" in conditions for manufacturers. The bank said its index has now risen 16 points from its low in November 2008.</p><p>"Industrial activity continues to accelerate," suggesting stronger economic growth for the first quarter of 2010, said HSBC economist Qu Hongbin in a statement. "But rising input and output prices also point to greater inflationary pressure, which will likely prompt more tightening measures in the coming months."</p><p>China's economic growth accelerated to 10.9 percent over a year earlier in the final quarter of 2009, driven by a 4 trillion yuan ($586 billion) stimulus.</p><p>But the government worries that a flood of lending by state banks last year to support the stimulus is fueling inflation and is tightening control to prevent a new surge of lending this year. Institutions were ordered last month to set aside more reserves to control credit growth and economists expect an interest rate increase this year.</p><p>China's industrial output has rebounded thanks to stimulus measures aimed at boosting sales of home appliances and autos.</p><p>The expansion of such policies to a wider area from the original nine of China's 31 provinces and big cities will help sustain that growth, Jing Ulrich, head of China equities at J.P. Morgan, said in a report to clients.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=68238869&bid=informcom" /></div><div id="copyright"><div>

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