China’s manufacturing activity surges in September, affirming its path to economic recovery

china economy
China’s economic growth hit a three-decade low in 2018, adding to pressure on Beijing to beef up stimulus measures and settle a tariff war with Washington.

  • Manufacturing activity in China rose in the month of September. 
  • The official China Manufacturing Purchasing Managers Index (PMI) rose to 51.5 in September, from 51 in August. 
  • A Reuters poll of economists showed expectations for a reading of 51.2
  • Manufacturing activity remained strong ahead of the week-long Golden Week national holiday that starts on Thursday.
  • The Caixin/Markit PMI, a private survey, showed manufacturing held roughly at the same pace in September, with a reading of 53 versus 53.1 in August. 
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China’s huge manufacturing sector continued to recover in September, affirming the world’s second largest economy is recovering from the pandemic, according to data on Wednesday. 

The official China Manufacturing Purchasing Managers Index (PMI) rose from 51 in August to 51.5 in September, beating analyst estimates. 

Analysts polled by Reuters were expecting a reading of 51.2. 

A PMI reading of 50 is the separation point between contraction and expansion.

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PMI survey data is widely used to track trends in economic activity across the world’s biggest economies.

Manufacturing remained high ahead of the week-long Gold Week national holiday, which starts this Thursday in China. 

The data is the latest sign that the world’s second largest economy, which was first hit by coronavirus through an outbreak in the city of Wuhan in January, is seeing a steady increase in activity. 

The Caixin/Markit PMI, a private manufacturing activity also released on Wednesday, tipped slightly lower but still stood well above expansion territory, with a reading of 53 in September versus 53.1 in August.

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Dr. Wang Zhe, senior economist at Caixin Insight Group said: “The Caixin China General Manufacturing PMI came in at 53 in September, dipping from 53.1 the previous month. Before August, the last time the index climbed above 53 was January 2011. That indicates the post-coronavirus manufacturing recovery has stayed strong, managing to even accelerate over the past two months.”

IHS Markit said new businesses expanded at the strongest rate since January 2011, aided by a solid rebound in export sales.