China's factory activity increases in September, first time in three months

Factory activity in China surpassed expectations in September and expanded for the first time in three months, according to data released on Friday. In September, the National Bureau of Standards (NBS) reported a rise in the Manufacturing Purchasing Managers Index (PMI) to 50.1 from 49.4. Growth and contraction are separated by the 50-mark every month.

From 52.6 in August, the official non-manufacturing PMI fell to 50.6 in September. The manufacturing boom rebounded in September thanks to stimulus measures and cooling weather. Manufacturing and services activity fell to 50.9 from 51.7.

China's economy continues to recover as all three indices are in the expansionary range this month. The non-manufacturing index remained above a threshold, but non-manufacturing sector expansion slowed.


According to the composite PMI, China's enterprises continue to expand generally, but the pace has slowed. A further decline in the Caixin/Markit manufacturing PMI was reported on Friday, dropping to 48.1 from 49.5 in August.



Caixin Insight Group senior economist Wang Zhe said the pandemic remains the most significant factor affecting enterprises. In addition to the complex pandemic situation, COVID controls still negatively impact the economy.

In September, manufacturing supply and demand were both weakened; the job market was weak; logistics and transportation were sluggish; the cost of production and prices continued to decline; and purchases and inventories declined. As a result of the economic concerns, market optimism declined significantly.
Due to mainland China's zero-COVID policy, the World Bank cut mainland China's GDP growth forecast from 5 percent to 2.8 percent for 2022.

FAQ

1. What was mainland China's GDP growth forecast according to the World Bank?
   Reduced from 5 per cent to 2.8 per cent.
2. What is affecting the Chinese economy?
   The COVID control policies are harming China's economy.