Manufacturing in China expanded last month — the first time in nine months — a leading independent index published yesterday said, confirming official data indicating that the key sector is stabilizing.
The CLSA China Purchasing Managers Index, or (PMI), a closely watched indicator in the world’s third-largest economy, rose sharply to 50.1 last month from 44.8 the previous month. A number above 50 means manufacturing expanded.
The independent reading supported the trend seen in the PMI that saw the sector rise to 53.5 last month, up from 52.4 in March, when the indicator was released on Friday by the China Federation of Logistics and Purchasing (中國物流與採購聯合會).
Manufacturing accounts for more than 40 percent of the economy in China, which has been hit hard by evaporating demand for its products in key export markets.
“China’s government has been extremely successful in stimulating investment and, combined with a sharp improvement in export orders, this has pushed the PMI back into positive territory in April,” said Eric Fishwick, CLSA head of economic research.
The official index tends to be more upbeat because it attaches greater weight to state-owned enterprises, which usually follow government directions and benefit first from stimulus policies, Sherman Chan (陳穎嘉), of Moody’s Economy.com, wrote in a research note.
The official data indicated new orders are rising driven by domestic demand, while the CLSA index indicated export orders continue to contract, but the rate was slowing, Chan said. Unemployment is also falling as activity increases, and that would help get migrant workers back into jobs, she said.
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