China Growth Rebound
China Manufacturing and Services Return to Growth as Economic Stimulus Measures Take Effect
Anonymous
China’s official manufacturing PMI returned to expansion in September at 50.1, while the nonmanufacturing index rose to 50.2; a private survey also showed stronger manufacturing and services activity, with new orders improving. Construction and several financial and communications industries helped lift nonmanufacturing activity, and survey respondents reported greater optimism. The rebound offers a modest sign of stabilization, but weak domestic demand, higher energy costs and concerns among trading partners about China’s manufacturing capacity and reliance on exports continue to weigh on the outlook. Beijing announced targeted fiscal and monetary support, though Nomura economists judged the measures too limited to address major growth barriers, while Goldman Sachs said their wider impact would depend on implementation.
Key Points
1
The official manufacturing PMI’s new-orders sub-index reached 50.5 and its production sub-index was 51.7, indicating both demand and output were expanding.
2
The private RatingDog manufacturing PMI rose to 52.1, its highest reading in five months; new export business also grew faster for the first time in three months.
3
The construction activity index climbed 3.4 percentage points from August to 50.3, its highest level of the year, while telecommunications and financial and insurance services each recorded activity readings above 55.
4
Chinese manufacturers are benefiting from demand for artificial-intelligence equipment, even as weak consumer demand and higher energy costs pressure the sector.
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