China Manufacturing Gauge Shows 4th Month of Expansion
A private gauge of China’s factory activity showed an expansion for the fourth straight month in November, following a sharp rebound in an official gauge, indicating warming demand for Chinese goods.
The Caixin manufacturing purchasing managers index rose to 51.8 from 51.7 in October, Caixin Media Co. and research firm Markit said Monday. The reading stayed above the 50 mark that separates expansion in activity from contraction.
A component measuring new export orders had the first back-to-back monthly increase for over a year-and-a-half, Caixin and Markit said in a statement.
Respondents cited a recovery in overall demand while the employment subindex also improved, said Zhengsheng Zhong, an economist at CEBM Group.
Despite the continued recovery in activity, “business confidence remained subdued, as concerns about policies and market conditions persisted, and their willingness to replenish stocks remained limited,” Mr. Zhong said.
China last week held off from retaliating against the U.S. after President Trump signed a bill supporting Hong Kong’s anti-Beijing protesters. Officials of both sides said they were still confident they can sign a partial trade deal in the coming weeks.
China’s official manufacturing PMI rose to 50.2 in November from 49.3 in October, the National Bureau of Statistics said Saturday. It was the first time since April that this key gauge of manufacturing activity registered above the 50 mark.
In an article published Sunday, China central bank Gov. Yi Gang said China won’t resort to “competitive” quantitative easing even if other major economies are approaching zero interest rates.
The country’s economic growth remains within a reasonable range and inflation is relatively mild overall, Mr. Yi wrote in an article published by the leading Communist Party theoretical journal Qiushi.
The Caixin PMI more closely tracks small, private manufacturers, while the official index focuses more on large, state-owned firms.
Many Chinese exporters are small and private firms. The official PMI has a larger sample base, surveying 3,000 manufacturers nationwide, while Caixin polls 500 companies.
Source: Dow Jones