Manufacturing in China expanded last month after contracting for five consecutive months, an official survey of factory managers released yesterday showed, suggesting a rebound in industrial activities following the Lunar New Year holiday.
The official purchasing managers’ index (PMI) rose from 49.1 in February to 50.8 last month. The index is on a scale up to 100, where 50 marks the cutoff between expansion and contraction.
The monthly manufacturing PMI has mostly been less than 50 over the past 12 months: Other than this month, factory activities only recorded an expansion in September last year.
Photo: EPA-EFE
Chinese National Bureau of Statistics senior statistician Zhao Qinghe (趙清河) said the market became more active as companies resumed and sped up production after the Lunar New Year holiday.
The survey also showed that some problems for companies remained, including increasing competition in industries and a lack of market demand, Zhao said.
During the annual session of the Chinese National People’s Congress last month, Beijing said it would encourage consumers to scrap old appliances and trade in their cars for electric vehicles to help spur domestic demand.
It also said that 10.4 billion yuan (US$1.46 billion) would go to upgrading industries and modernizing manufacturing.
The policies promoting the trade-ins of consumer goods and large-scale equipment upgrades still needed further implementation to support the high-quality development of the manufacturing industry, Zhao said.
The nonmanufacturing PMI rose to 53 from 51.4 in February, the survey showed.
The reading is the highest since June last year.
The better-than-expected manufacturing PMI “reflects signs that the economy is stabilizing” despite seasonal factors and a low base of comparison from the Lunar New Year holiday, Jones Lang Lasalle Inc chief economist for Greater China Bruce Pang (龐溟) said.
The nonmanufacturing PMI also shows that “companies have relatively strong confidence and expectations for future business,” he said.
The recovery of the world’s second-largest economy following the shocks of the pandemic faced many obstacles, one of the largest being a downturn in the real-estate industry after authorities moved to curb excess borrowing by property developers.
The Chinese Communist Party’s target is to grow the economy by about 5 percent this year, an ambition that economists say might be hard to attain.
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