Rapid growth in China's manufacturing sector, PMI rises above 50

Beijing, Ta. 30 September 2020, Wednesday

Activity in China's manufacturing sector rose sharply in September, helping to boost export growth. The last few months have seen an increase in exports. Thus China's economy is showing steady recovery.

The Purchasing Managers' Index (PMI) of China's manufacturing sector, which stood at 31 in August, rose to 31.50 in September. An index above 50 is called an extension of that area.

Analysts had expected the PMI to be 41.20. China's manufacturing sector PMI has risen due to rising foreign demand. Activity in China's industrial sector is slowly returning to its previous level.

Expansion in the infrastructure sector due to stimulus, stagnant demand and surprising growth in exports have given impetus to China's manufacturing sector.

The sub-index for new export orders stood at 30.60 in September as against 8.10 in August. This is an improvement after eight consecutive months of decline. New export orders in China have seen a three-year pace.

The high PMIs in the manufacturing and non-manufacturing sectors indicate that the economy in China is recovering. Economic indices ranging from trade to producer prices also signal an improvement in the industrial sector.

August saw strong growth in the profits of companies in China's manufacturing sector. Service sector activity in China also rose sharply in September. However, some analysts believe that the road ahead for China is thorny.

The global epidemic is not yet under control, which could affect China's imports and exports. The trade war between China and America is not over yet.