Manufacturing sector improves for third month, NBS says
China’s manufacturing purchasing managers’ index (PMI) for May stood at 50.6, below analysts’ expectation of 51, but the reading reflects an economic recovery on course amid continuous efforts to prevent a second wave of imported COVID-19 infections.
According to data from the National Bureau of Statistics (NBS), the manufacturing PMI slid 0.2 points month-on-month in May, but it remained in expansion territory for a third straight month since the COVID-19 outbreak in late January.
Pang Chaoran, an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Sunday that weak overseas demand mainly contributed to the drop.
Data from the NBS showed that the manufacturing sector’s new export order index remained at a low level of 35.3 in May, slightly up 1.8 points from April. In the same month, the new import order index stood at 45.3, up 1.4 points month-on-month, reflecting increased imports driven by the country’s steady economic recovery.
“Although some developed economies have eased lockdowns, their manufacturing activity and market demand haven’t totally recovered, a situation that – combined with some countries’ increased trade protectionism – affected the healthy development of international trade,” he said.
Despite foreign shocks, China’s manufacturing and services sectors continued to recover thanks to packages of policies to stabilize the economy.
Zhao Qinghe, a senior statistician with the NBS, noted that 81.2 percent of the companies polled have resumed more than 80 percent of their manufacturing and their operations continue to improve.
According to the survey, the manufacturing indexes of 14 industries including food, petroleum processing and auto manufacturing remained in expansion territory, while textiles, the apparel industry and wood processing contracted.
In May, China’s non-manufacturing PMI expanded to 53.6, up 0.4 points from the previous month, according to the NBS. The business activity indexes in sectors including transport, hospitality and catering, telecommunications and software were all above 55, reflecting higher market vitality.
The performance of the manufacturing and non-manufacturing sectors indicated China’s economy may return to positive growth in June, Tian Yun, vice director of the Beijing Economic Operation Association, told the Global Times on Sunday.
He estimated that China’s GDP might have been flat year-on-year in the second quarter.
“Chinese economic growth will continue to drive the global economy, as the economy has stayed unchanged and will remain sound in the long run,” he said.
Yu Miaojie, deputy dean of the National School of Development at Peking University, told the Global Times that Chinese economy is estimated to grow about 3 percent in 2020.
Even if China only achieves 3 percent GDP growth this year, the country would still be the locomotive of the global economy, he said. “As COVID-19 continues to ravage the world, major economies including the US, the EU and Japan may see protracted declines this year.”
A staff member works at a factory in Jize County of Handan City, north China’s Hebei Province, May 5, 2020. Companies in the county are accelerating production to meet customers’ demand. (Xinhua/Wang Xiao)
