March 31, 2024
Today at
08:14
Manufacturing activity in China grew in March for the first time since September, a sign that the world’s second-largest economy is stabilizing.
The official purchasing managers index (PMI) rose last month from 49.1 to 50.8, according to figures from the Chinese National Bureau of Statistics. That is more than expected: economists expected an increase to 50.1. A figure above 50 indicates growth, below 50 there is a contraction. The PMI had not risen above 50 since September 2023.
The PMI index for non-manufacturing activity, which includes services and construction, rose from 51.4 to 53 points.
The revival of the factories is an encouraging sign for the Chinese government. It is trying to revive the weakened economy after the corona pandemic. An unprecedented crisis in the real estate sector, record youth unemployment, low consumer confidence and disappointing global demand have thrown sand in the engine.
Lowest growth in decades
China is aiming for gross domestic product (GDP) growth of around 5 percent this year. Given the many economic headwinds, analysts estimate that it will be a challenge to achieve that figure. In 2023 there was a growth of 5.2 percent. That was the lowest figure in three decades, excluding the Covid period.
In recent months, authorities have pumped more money into the banking system to boost lending. Government spending has also accelerated to make additional investments in infrastructure. It has also promised to provide funds to consumers and businesses to replace old goods such as cars and home appliances. The results of those measures have been mixed so far.
