On August 29, 2024, a container ship docked at the Qianwan Container Terminal in Qingdao Port, China, to load and unload containers.
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Factory activity at China’s small manufacturers rose slightly last month, a private survey showed, as export orders offset weak domestic consumption.
this Caixin/S&P Global Manufacturing PMI The score for August was 50.4, according to data released on Monday, beating the median estimate of 50.0 in a Reuters poll. The latest data also reflects a rebound from July’s contraction of 49.8.
Private indicators focus primarily on smaller and export-oriented firms, in contrast to broader indicators. Official PMI data released on Saturdayshowing that the decline in manufacturing activity in the country widened to a six-month low of 49.1.
“The difference is the improvement in export orders because global demand is relatively elastic compared to domestic demand in China,” Natixis Asia Pacific economist Gary Ng told CNBC’s “Squawk Box Asia” on Monday morning. But Ng noted that as the Rising geopolitical risks, “who knows how long this will last.”
Wu explained that the Chinese economy has been quite resilient externally, adding that due to its state-led nature, the Chinese economy has benefited from the resources that the government has been able to mobilize.
But the question boils down to whether the government is willing to “really support this short-term growth,” he said. While leadership has expressed support for the long-term goals, Ng said family sentiment needs to improve in the short term.
Faced with weak consumption, a sluggish real estate market and rising geopolitical risks, it is difficult for the Chinese economy to regain growth momentum.
Ng said it would be “challenging” for China to achieve its 5% GDP growth target, but it was more likely to achieve a target closer to 5%.
The Caixin PMI data, compiled based on answers to a questionnaire sent to purchasing executives, has traditionally been one of the earliest monthly measures of China’s economic health.
The private manufacturing index surged to a record high of 51.80 in June before plunging below the 50 mark in July. A reading above 50 indicates expansion in manufacturing output, while a reading below that indicates contraction.
