What factors pulled China’s manufacturing sector to recover beyond forecast?
Including November, the PMI in the manufacturing sector of China had a streak of increases for 9 consecutive months, a sign of a strong recovery of the world’s second largest economy.
|Official Purchasing Managers’ Index (PMI) in China’s manufacturing reached 52.1 points in November.|
According to China’s National Bureau of Statistics, the official Purchasing Managers’ Index (PMI) in the country’s manufacturing sector reached 52.1 points in November, the highest in more than 3 years and even better. much more than the 51.5 point level forecasted by economists with Reuters. In October, China’s manufacturing PMI reached 51.4 points.
PMI index is a measure of “health” of the sectors / areas surveyed each month. Nsectors / fields reached cA PMI above 50 indicates a growth signal, whereas a PMI below 50 is a sign of decline.
According to Zhao Qinghe, chief statistician at the National Bureau of Statistics of China, there were four factors combined to pull up China’s manufacturing activity in November. First, the supply and demand of manufactured goods. China continues to improve. Second, import and export activities of the world’s second largest economy have recovered stably. In addition, the prices of raw materials and output products both increased. In the end the prospects for manufacturers of different sizes have all improved.
In the service sector, China PMI also recorded the 9th consecutive month of gain. According to the National Bureau of Statistics of China, the PMI in the non-manufacturing sector reached 56.4 points, higher than the 56.2 point achieved in October. Overall, the composite PMI of China Nationality in November reached 55.7 points, inching up from 55.2 in October.
Analysts said that the results of the Chinese economic indicators released recently showed that the country’s economy is on the verge of a strong recovery. “Looking at the economic data in China, it shows a steady recovery,” commented Jackson Wong, director of asset management at Amber Hill Capital. This expert said that the world’s second largest economy is expected to continue its growth momentum in 2021 and could become the only major economy to achieve (positive growth) growth in 2020.
Meanwhile, Julian Evans-Pritchard, senior China economist at the consulting firm Capital Economics, said that “the most important development” in China recently was the recovery of household spending. . This trend is likely to continue as the country’s labor market remains confined and consumer sentiment is still affected. Covid-19 period.
“The above trend will stimulate the recovery of the services sector. It will also give a boost to the Chinese manufacturing sector while the sector will continue to benefit from more favorable fiscal policy and import demand. high growth rate, “said Julian Evans-Pritchard.
China, which recorded the world’s first Covid-19 infection, is one of the few economies to maintain positive growth in 2020, albeit at a slow growth rate. The International Monetary Fund (IMF) forecasts that China’s economy will grow 1.9% in 2020, less than a third of the 6.1% growth rate the previous year.