Warming manufacturing sector cements China’s economic recovery – Xinhua

Quality inspectors check a new energy vehicle at an automobile manufacturing workshop in Yibin, southwest China’s Sichuan Province, July 20, 2022. (Xinhua/Liu Qiong)

BEIJING, Aug. 31 (Xinhua) — China’s manufacturing sector, after the epidemic disruptions seen in the second quarter, has started to regain momentum, providing strong impetus for the sustained recovery of the economy as a whole.

The Purchasing Managers’ Index (PMI) for the manufacturing sector rebounded from 49 in July to 49.4 this month, according to National Bureau of Statistics (NBS) data released on Wednesday. Of the 21 industries surveyed, 12 reported rising PMIs, indicating an improving business climate for the majority of manufacturers.

Some major industries have continued to develop. The consumer goods production index rose from 51.4 to 52.3 in August, and that of the equipment and high-tech manufacturing sectors stood at 50.9 and 50 respectively, 6.

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

“Despite the impact of COVID-19 and heat waves, China’s economy has continued to recover,” NBS senior statistician Zhao Qinghe said on Wednesday.

In recent months, signs of warming have been spotted in factory operations across the country. Automakers posted higher production and profits, and high-tech manufacturers recorded dynamic expansion. Industrial and supply chains, hard hit by disease outbreaks, have recovered and emerged stronger.

Wang Hanchao, founder of a producer of electric battery management systems, said the company’s three assembly lines were operating near capacity and he expected the company’s revenue this year to be higher. double those of 2021.

“The new energy vehicle sector has a bright prospect, and China is taking the lead in related industrial chains, which adds certainty for business development in the future,” Wang said.

With steady performance in key manufacturing sectors, the economy has held steady despite the challenges and is expected to regain strength for the rest of the year, analysts said.

Although the economic indicators are encouraging, additional efforts are still needed to strengthen the growth dynamic.

Data on Wednesday showed that the PMI sub-indexes measuring new orders, commodity inventories and employment rose in August from the previous month. But the sub-index of production remained stable and that of delivery times from suppliers fell slightly.

While large companies returned to expansion territory this month, mid-sized manufacturers improved but remained in contraction and small businesses continued to experience relatively high operating pressure.

To consolidate the recovery trend, China has recently introduced a series of more decisive support measures.

At a meeting last week, the State Council announced 19 follow-up measures to create greater synergy between pro-growth policies already in place, covering fiscal, financial, industrial and other areas. Financial support has been directed towards infrastructure and major projects, and real borrowing costs will be further reduced for the real economy.

The aim is to promote economic stabilization and recovery, keep major economic indicators within the appropriate range and work to achieve the best possible results, according to the meeting.

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