Published: Mon, December 02, 2019
Economy | By

China’s Manufacturing Is Back in Expansion

China’s Manufacturing Is Back in Expansion

Women work in the production section at a factory manufacturing air conditioners in Huaibei, Anhui province.

A GAUGE of China's manufacturing sector jumped unexpectedly in November, signalling a recovery in activity amid government support and a stabilising global economy.

Besides, followed by the reveal of China's National Bureau of Statistics' report, several analysts were quoted saying that a surprise uplift in domestic demand following a slew of fiscal injection by the People's Bank of China (China's Central Bank) to revive a slowing Chinese economy such as low-priced long-term debts to small- and intermediate-scale businesses, had steadied growth momentum on November.

China's factory activity rebounded for the first time in seven months in November, data showed on Saturday, despite the looming threat of the new USA tariffs in few weeks if Beijing and Washington fail to sign a partial trade deal.

The Purchasing Managers' Index (PMI) for China's manufacturing sector edged up to 50.2 in November from 49.3 in October, the National Bureau of Statistics (NBS) said on Saturday.

A private survey showed that conditions in China's manufacturing sector continued to improve in November.

The gauge of new export orders saw its first back-to-back monthly growth since early 2018. Factory output also rose to 52.6 in November, marking the strongest pace since March.

To help avert a sharper slowdown, China has brought forward 1 trillion yuan (S$194.6 billion) of the 2020 local government special bond quota to this year. Some analysts say that could be a sign that the government is anxious about the downward economic pressure.

The reading is it is 50-points up than expected.

But recent developments underline the increased uncertainty in trade conflicts, which bodes ill for the prospects of external demand.

The sub-index for production and new orders rose to 52.6 and 51.3 in November, up 1.8 and 1.7 percentage points from October, respectively - the highest since the second half of the year.

US President Donald Trump said this week that the world economy close to reaching an agreement on the first phase of the agreement. But trade experts and people close to the White House said it could slide into the new year, given China is pressing for more extensive tariff rollbacks.

A trade deal has now stalled after the United States passed legislation backing protesters in Hong Kong, news website Axios reported on Sunday, citing a source close to Trump's negotiating team.

The NBS pointed out the growth meant a 0,9 percent rise compared to October and it shows a recovery of the industry after six months shrinking.

The official August composite PMI, which covers both manufacturing and services activity, dropped to 53.0 from July's 53.1.

A strong services sector has offered Beijing some cushioning effect as manufacturers face growing difficulties in securing demand both at home and overseas. "Meanwhile, sentiment in the property market continues to cool down, which clouds the outlook of the sustainability of property investment growth", researchers from China International Capital Corporation (CICC) said in a note this week.

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