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Monday, August 31, 2020, 18:31
China's PMI stays in expansion territory as economy rebounds
By Xinhua
Monday, August 31, 2020, 18:31 By Xinhua

This undated photo shows a worker working at a machinery manufacturing plant in Qingzhou, Shandong province. (WANG JILIN / FOR CHINA DAILY)

BEIJING - The purchasing managers' index (PMI) for China's manufacturing sector decreased to 51 in August from 51.1 in July, the National Bureau of Statistics (NBS) said Monday.

A reading above 50 indicates expansion, while a reading below reflects contraction.

The production and operation activities of Chinese enterprises have been continuing a sound momentum.

Zhao Qinghe, Senior statistician, National Bureau of Statistics, China

Policies aimed at balancing epidemic control and economic development yielded notable fruit, said NBS senior statistician Zhao Qinghe, adding that China's economy keeps recovering with good prospects.

The sub-indices of the manufacturing PMI are indicators of further economic recovery.

The sub-index for production stood at 53.5 in August, with that for new orders at 52. The sub-index measuring new export orders gained 0.7 points to 49.1.

"The production and operation activities of Chinese enterprises have been continuing a sound momentum," Zhao said.  

ALSO READ: China's manufacturing PMI picks up in June

Non-manufacturing PMI rises

NBS data released Monday also showed an extensive rebound in non-manufacturing sectors as their PMI came in at 55.2 in August, up from 54.2 in July, and service suppliers, including those particularly hit hard by the epidemic, showed stronger business vitality.

The non-manufacturing PMI has remained above 50 for six months in a row, data from the NBS showed.

Driven by the overall economic recovery in China, the sub-index for business activities of leasing and business services returned to the expansion zone for the first time since the outbreak of the epidemic, Zhao noted


In August, the service sector accelerated its pace of recovery, with the sub-index for business activities rising 1.2 points from the previous month to 54.3.

In breakdown, transportation and telecommunications sectors saw a faster recovery in their business volume, with the sub-indexes standing above 60 for the fourth consecutive month, NBS data showed.

READ MORE: China's PMI expansion streak speaks of stronger recovery

As the domestic COVID-19 prevention and control situation remained stable, consumer demand was further unleashed amid business restoration and reviving market activities, Zhao said.

Driven by the overall economic recovery in China, the sub-index for business activities of leasing and business services returned to the expansion zone for the first time since the outbreak of the epidemic, Zhao noted.

Enterprises demonstrated a stable level of confidence for growth, as Monday's data showed that the business expectation reading remained flat with that of the previous month at 61.3. Sub-indices for industries including rail transportation, air transportation, accommodations and internet software were above 65.

Meanwhile, the sub-index for activities in the construction sector dropped 0.3 points to 60.2 percent, down from a relatively high expansion level.

Transportation and telecommunications sectors saw a faster recovery in their business volume, with the sub-indexes standing above 60 for the fourth consecutive month, NBS data showed

This month, demand continued to recover, foreign trade policy took effect, new growth driver development accelerated, the market gradually picked up, and business expectations improved, said Zhao.

Despite the positive signs, the PMI for small businesses went down 0.9 points to 47.7. 

"Many small firms reported problems of insufficient demand and financial stress," said Zhao. "They were still faced with hardships in production and operation."

Wen Bin, chief analyst at the China Minsheng Bank, said more efforts should be made to step up support for key areas and weak links, provide more targeted and inclusive policies for small and micro businesses, reduce burdens of enterprises, and increase income of residents to enhance consumption capacity and willingness to spend.

Other key indicators including consumption, jobs and foreign trade continued to warm up in recent months, and the revival is expected to extend through the rest of the year amid efforts to buoy domestic demand.

Following a stronger-than-expected Q2 rebound in GDP, Global credit rating agency Moody has raised its growth forecast for the Chinese economy this year to 1.9 percent from 1 percent earlier.  


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