The HSBC China PMI flashed a surge to 51.9 in January based on its preliminary measure, with any number above signaling expansion. The final count for December was 51.5. The figure almost certainly means that overseas demand for China exports have picked up, although with recessions in much of Europe and Japan, and the U.S. in an historically slow growth phase, it is hard to figure where. It may be that internal consumption of goods by China’s massive middle class it part of the demand. It may also be that inventories of manufacturer goods in China has grown, and not actually been sent overseas.

According to Bloomberg:

The data suggest that China’s expansion at the start of 2013 will equal or exceed its 7.9 percent clip in the fourth quarter. Sliding Japanese exports and below-forecast growth in South Korea reported today underscore Asian economies’ dependence on China as austerity measures in Europe limit demand.

“Despite the still-tepid external demand, the domestic- driven restocking process is likely to add steam to China’s ongoing recovery in the coming months,” Qu Hongbin, HSBC’s chief China economist in Hong Kong, said in a statement.

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