A worker grinds at a workshop of a tool manufacturing company in the Qingdao Economic Development Zone, east China’s Shandong province, on March 31, 2023.
CFOTO | Future publication | Getty Images
China’s manufacturing activity continued to expand among smaller manufacturers in November, suggesting the country’s recent stimulus efforts have already helped lift some sectors of its ailing economy. The private survey was released on Monday.
The Caixin/S&P global manufacturing purchasing managers’ index came in at 51.5, beating the average estimate of 50.5 in a Reuters poll. It also marks the second consecutive month that the official reading has remained above the key 50 level that separates growth from contraction.
“Central to the recent improvement in manufacturing sector conditions is high new business inflows,” said Wang Zhe, senior economist at Caixin Insight Group.
New orders from Chinese manufacturers rose at the fastest pace in more than three years, a private survey noted. “The renewed rise in export orders supported the rise in overall new orders,” Wang said.
This private gauge comes later Official PMI dataReleased on Saturday, it indicated that manufacturing activity in the country expanded to 50.3 in November from 50.1 in the previous month. The reading beat Reuters expectations of 50.2.
Compared to the official PMI survey, which usually surveys large and state-owned enterprises, the Caixin survey covers more small and medium-sized enterprises and private sector companies.
“This is an early sign of stabilization in China’s manufacturing sector, supported by the promise of stimulus,” said Gary Ng, senior economist at Natixis. However, Ng highlighted that it is still important to assess the improvement in the size of real estate and financial spending in the coming months.
“Bringing more sustained returns requires better consumer and business attitude,” Ng told CNBC. “With fierce domestic competition and external geopolitical headwinds, price wars and tariffs may still be risks in 2025.”
China’s economy has shown some early signs of recovery following a slate of stimulus measures introduced since late September. World’s second largest economy reported strong growth in retail sales for OctoberIt beat Reuters’ expectations.
However, investment Real estate fell 10.3% in the January-October period from a year agoAnd also industrial gains of the country October was down by 10% compared to the previous yearMarks the third straight month of declining profits.
At a Politburo meeting in September, the country’s top leaders stepped up efforts to boost growth by bracing for increased fiscal spending and stabilizing the struggling property sector. To boost liquidity in the economy, the People’s Bank of China lowered the reserve requirement ratio, or RRR, by 50 basis points, reducing the amount of cash banks are required to hold in reserves.
In early November, China has also unveiled a five-year plan It indicates that additional financial support, worth 10 trillion yuan ($1.4 trillion), will be provided next year to tackle local government debt problems.
However, Donald Trump’s 2024 presidential victory has raised concerns about increasing tariffs on Chinese goods. destroys its export sector.
“Ironically, our threat of tariffs may actually increase orders for Chinese exports, as US companies are now rushing to get their orders in before those tariffs take effect,” said Julian Evans-Pritchard, head of China. Economics in capital economics.
“I think that’s boosting the export sector, which is why we’re getting this strong manufacturing PMI,” Pritchard added.
