BEIJING, Oct. 1, 2023 – China’s factory activity expanded for the first time in three months in September, a sign that the world’s second-largest economy is gradually recovering from a post-pandemic malaise.
The official manufacturing purchasing managers’ index (PMI) rose to 50.2 in September, from 49.5 in August, according to data released by the National Bureau of Statistics (NBS) on Saturday.
A reading above 50 indicates expansion, while a reading below 50 indicates contraction.
The increase in the PMI was driven by a rebound in production and new orders, the NBS said. The production sub-index rose to 50.3 in September, from 49.6 in August, while the new orders sub-index rose to 50.5 in September, from 49.9 in August.
The expansion in factory activity is a welcome sign for the Chinese economy, which has been hit hard by the COVID-19 pandemic and a series of lockdowns in recent months.
The Chinese government has been rolling out a number of stimulus measures to support the economy, and the expansion in factory activity suggests that these measures are starting to have an impact.
However, analysts caution that the Chinese economy still faces a number of challenges, including a weak property market and rising inflation.
“The expansion in factory activity in September is a positive sign for the Chinese economy,” said Julian Evans-Pritchard, chief China economist at Capital Economics. “But it is important to note that this is only one month of data, and we need to see more evidence of a sustained recovery before we can be confident that the economy is on the mend.”
The expansion in factory activity is also good news for the global economy, as China is a major exporter of goods.
“A stronger Chinese economy is good news for the global economy,” said David Folkerts-Landau, chief global economist at Deutsche Bank. “China is a major consumer of goods and services from other countries, so a stronger Chinese economy will boost global demand.”