On March 31, 2023, in Qingzhou Economic Development Zone, Shandong Province, a worker polished equipment in the workshop of an equipment manufacturing company.
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Manufacturing activity among China’s smaller manufacturers continued to expand in November, a sign that the country’s recent stimulus measures have helped boost some sectors of its struggling economy. Private investigation released on Monday.
The Caixin/S&P Global Manufacturing Purchasing Managers’ Index was 51.5, exceeding the median forecast of 50.5 in a Reuters poll. It also marked the second month in a row that official data remained above the key 50 level that separates growth from contraction.
“The core of the latest developments in manufacturing conditions is the increase in new business inflows,” said Wang Zhe, senior economist at Caixin Think Tank.
Private surveys indicate that Chinese manufacturers are receiving new orders at the fastest pace in more than three years. “The renewed growth in export orders also supports the growth of overall new orders,” Wang said.
This private instrument follows Official PMI dataData released on Saturday also showed that the country’s manufacturing activity expanded to 50.3 in November from 50.1 the previous month. The reading beat Reuters’ forecast of 50.2.
Compared with the official PMI survey, which usually polls large state-owned enterprises, the Caixin survey tends to cover more small and medium-sized enterprises as well as private companies.
“The economic growth is an early sign that China’s manufacturing industry is stabilizing on the back of the stimulus package,” said Gary Ng, senior economist at Natixis. However, Ng stressed that it would be critical to assess real estate in the coming months. Improvements and the scale of fiscal spending remain important.
“Better consumer and business confidence will be needed to bring about a more sustained rebound,” Ng told CNBC. “Price wars and tariffs may still be risks in 2025 due to fierce domestic competition and unfavorable external geopolitics.”
China’s economy has shown some tentative signs of recovery after launching a series of stimulus measures in late September. The world’s second largest economy Retail sales grow strongly in Octoberexceeding Reuters’ expectations.
However, investing in Real estate development fell 10.3% annually from January to Octobernational industrial profits are also A decrease of 10% in October compared with the same period last yearmarking the third consecutive month of profit decline.
At a Politburo meeting in September, China’s top leaders stepped up efforts to boost economic growth, pledging to increase fiscal spending and stabilize the struggling real estate industry. The People’s Bank of China lowered the reserve ratio (RRR) by 50 basis points to increase liquidity in the economy, thereby reducing the amount of cash reserves banks need to keep.
Early November, China also announced its five-year plan 10 trillion yuan ($1.4 trillion) worth of funding to address local government debt while signaling additional economic support next year.
However, Donald Trump’s victory in the 2024 presidential election has raised concerns about tariffs on Chinese goods, which could lead to weaken its export sector.
Julian Evans-Pritchard, head of China, said: “Ironically, the threat of US tariffs may actually increase orders for Chinese exports in the short term as US companies are now Hurry to get your orders in before these tariffs go into effect.
Pritchard added: “I think it’s also boosting the export sector, which is why we’re getting stronger manufacturing PMIs.”
