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30 Nov, 2020 08:17

China’s economic activity continues to gain momentum amid strong recovery from Covid crisis

China’s economic activity continues to gain momentum amid strong recovery from Covid crisis

China’s official manufacturing Purchasing Managers’ Index (PMI) has expanded for the ninth straight month to 52.1 in November. A reading above 50 on the index indicates expansion.

The PMI, a key indicator of the health of a country’s manufacturing sector based on a survey of sentiment among factory owners, rose by 0.7 points compared to last month, according to data released by China’s National Bureau of Statistics on Monday. The reading continued to beat market expectations, with analysts polled by Reuters forecasting November’s reading to stand at 51.5.

Meanwhile, China’s non-manufacturing PMI, which reflects sentiment in the services and construction sectors, also finished higher than expected, increasing to 56.4 this month versus 56.2 recorded in October.

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The composite PMI that covers both manufacturing and non-manufacturing sectors also showed growth. “The composite PMI was 55.7 in November, up 0.4 from previous month, showing that corporate production and operation activities continued to accelerate in China and the stable recovery trend was further consolidated,” senior NBS statistician Zhao Qinghe said, as quoted by media.

The statistics agency said that the strong performance of the manufacturing sector was driven by sub-gauges of production and new export orders and import, which hit the best levels of the year. The strong performance of those spheres compensated for weaker growth in the textile and clothing sector, which was still in the contraction territory this month, according the NBS.

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An increase in exports and imports came despite the rising number of coronavirus infections across the globe. While some economies started to reopen, the resurgence of the virus may eventually push demand for China’s exports down, some analysts warned.

China, which was the first country to suffer from the coronavirus outbreak which forced a strict lockdown in the affected regions, is set to see the weakest economic growth in three decades this year, with its gross domestic product (GDP) expected to expand around two percent. The modest growth would still be much better than in most parts of the world, with all major economies except China expected to see contraction this year.

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