The return of the Chinese manufacturing sector comes with growing domestic demand, adding to the momentum of an economy that is rapidly recovering from the Coronavirus crisis.
The Kaixin Market, an independent manufacturing sector purchasing managers’ index, rose 53.6 from 53.0 in September, to remain above the 50 level separating growth and contraction for the sixth consecutive month. Analysts, in a Reuters poll, expected the reading to remain stable at 53.0.
Thus, the industrial sector in China is rapidly returning to pre-pandemic levels, which paralyzed large sectors of the economy at the beginning of the year, but the global outlook is getting darker, because many Western countries are still fighting the increasing number of cases of “Covid-19” disease, and are re-imposing lockdown measures. Mass. The October reading is the highest since January.
The index data for last October indicated an improvement in the business situation in the manufacturing sector, as companies recorded an increase in both production and total new business, with economic activity in China returning to its normal levels in the wake of the country’s success in a great way in containing the emerging coronavirus pandemic, In China, the matter was limited to the emergence of some small hotspots of the spread of the virus, but it is quickly contained through travel bans, conducting large-scale contact analysis and tracking the population of the area in which the infections appeared.
“In short, the word recovery is an appropriate description of the current macroeconomic situation as the pandemic continues to be controlled domestically … Corporate operations have improved and investors feel confident,” said Wang Shi, chief economist at the Kaixin Institute Group, a private consulting firm.
The Kaixin Index focuses on small, export-dependent firms, while the official survey tracks large firms and state-owned enterprises. The official survey showed factory activities expanded at a slightly slower pace in October, but came in slightly above analysts’ expectations.
On the other hand, the pace of export growth has slowed remarkably in light of the return of the number of people infected with the new Corona virus to increase in a number of Chinese export markets. However, the improvement in the overall market situation improved the corporate confidence, which reached its highest level since August 2014.
During the third quarter of this year, the Chinese economy had recorded a growth rate of 4.9 percent, after a historic contraction of 6.8 percent during the first quarter of this year, due to the outbreak of the new Corona virus, and then increased by 3.2 percent during the second quarter, according to official data.
For its part, the Chinese government has launched a new five-year economic plan aimed at focusing on domestic market dependence, technological innovation and environmental improvement as engines of economic growth.