China’s economy could be regaining momentum after major slowdown
Hong Kong: A return to growth in China’s manufacturing sector and a boom in travel during the annual “Golden Week” holiday is fuelling hopes that the economy could be regaining momentum after a major slowdown this year, a media report said.
China’s official manufacturing purchasing managers’ index (PMI) rose to 50.2 from 49.7 in August, the first time it has indicated expansion since March, according to the National Bureau of Statistics, CNN reported.
A PMI reading above 50 indicates growth or expansion, while any reading below represents a contraction.
Activity in services and construction also accelerated last month, according to a separate index that hit 51.7, its best level in three months, CNN reported.
A private gauge of activity released Sunday also showed the world’s second biggest economy continuing to grow, albeit at a slower pace than the previous month. PMI data released by Caixin Media and S&P Global showed both manufacturing and services losing some momentum.
Economists widely believe the official PMI survey covers mostly larger, state-owned enterprises, while the Caixin reading is focused on smaller, private firms.
The PMI readings have added to signs that the Chinese economy may be picking up momentum again after GDP growth slowed to just 0.8% for the June quarter compared to the three months prior, as a post-pandemic boom faded, consumers lost confidence and a deep property slump continued to weigh heavily on activity, CNN reported.
Bumper travel figures have also given analysts cause for cautious optimism.
Last Friday, China had kicked off the longest stretch of public holidays this year, spanning eight days to October 6.
On the first day of the holiday, the country’s national railway had handled 20.1 million passenger trips, setting a new record, according to data released by China State Railway Group. The Ministry of Transport expects highway traffic also hit a record, with an estimated 66 million vehicles on the roads, CNN reported.