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CHINA MANUFACTURING BOUNCES BACK

05-04-2016
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in 

China manufacturing activity in March expanded for the first time in nine months, according to official data.

The result was much stronger than expected, indicating the world's second-largest economy may be back on track after struggling for months due to a slump in global demand for Chinese products.

China's economy grew only 6.9 percent last year, its weakest rate in a quarter of a century.

The official Purchasing Managers' Index (PMI) from the National Bureau of Statistics (NBS), rebounded to 50.2 for March from 49.0 the previous month.

This was the highest number and first expansion since June 2015.

The result surpassed the median 49.4 predicted by economists in a recent Bloomberg News survey. A reading above 50 signals expanded activity.

Zhao Yang, China economist for Nomura, said the data was "much stronger" than forecast and showed "across the board" improvement.

This "means a rebound could be stronger and more lasting than we initially thought," he told AFP.

However, NBS analyst Zhao Qinghe warned the PMI figures could be partially attributed to seasonal factors, as well as to a rebound in fixed-asset investment and the property market.

There was also some relatively good news from the private Caixin Purchasing Managers' Index, which puts a greater emphasis on smaller firms.

That came in at 49.7, its highest reading in 13 months, the Chinese financial magazine said in a joint statement with data compiler Markit.

It said the figure showed "only a fractional deterioration in the health of the sector", as companies cited an improvement in orders. Although weak foreign demand "remained a drag" on growth, it added.

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