China manufacturing continues to grow, surveys show Chinese garment factory workers prepare products for export in Huaibei, Anhui province. Photograph: Reuters China's official manufacturing purchasing managers' index held steady in December at 50.6, matching November's seven-month high, as growth in new orders was unchanged and the pace of output softened marginally. With the main index above 50 for three successive months, the survey indicates that China's vast factory sector is expanding. A PMI reading below 50 suggests growth has slowed; above 50 indicates an acceleration. The official figures were released a day after a similar survey by HSBC suggested manufacturing activity was at its strongest since May 2011. Together the surveys support a growing consensus that economic activity in China revved up during October to December, after GDP growth had slowed for seven consecutive quarters to 7.4% in the third quarter. That provides a welcome sign for a global economy where the euro area and Japan are in recession and the US is struggling for significant growth. "Output has stayed above the 50-mark, showing that the manufacturing industry appears to maintain growth expectations, but the rate of growth has weakened," the National Bureau of Statistics, which released the data, said in a note. The official PMI reading was slightly below expectations; a poll of economists by Reuters last week predicted a rise in the PMI to 51.0. The survey showed output in oil processing, quarrying and tobacco industries slipped, while food processing, auto manufacturing, textiles, steel and electronics expanded, the bureau said. A new export orders sub-index fell to 50 from 50.2 in November. HSBC said its China PMI, which gathers more data from smaller, privately held firms with a strong export focus, rose in December to 51.5, its highest since May 2011. Some analysts cautioned that the pick-up in economic activity in recent months may reflect renewed investment spending, rather than the consumer activity that policymakers acknowledge is needed to rebalance the economy. "It's pretty clear that it's more driven by infrastructure and increasingly housing, that's driving heavy industry," Zhang Zhiwei, of Nomura International, said. Rising land prices have prompted widespread expectations that the real estate market will be revived by an investment-driven recovery that would offset weak export markets, even though the central government had pledged to maintain investment and purchasing restrictions to try to control prices. Railway spending delayed from earlier in 2012 was being rushed out before the end of the year, and rising prices for land purchased by state-owned developers could point to a relaxation in property market curbs that has yet to be made official, Zhang said. China was expected to achieve economic growth of 7.7% in 2012, forecasts in a benchmark Reuters poll show. That would mark the slowest full-year expansion since 1999. While that is well above the world's other major economies, it is below the roughly 10% annual growth China has experienced for most of the past 30 years. The government has relied on fine-tuning its policy settings to try to combat the worst downturn China has faced since the 2008-09 global financial crisis, studiously avoiding any hint of repeating a 4tn yuan (£395bn) stimulus package it launched back then, which led to a debt-fuelled spending binge by local governments.