Soaring shipments: An employee at a company manufacturing lithium batteries in Huaibei, in eastern China’s Anhui province. The Caixin manufacturing purchasing managers index rose to 51.5 last month, the highest since June. — AFP
SHANGHAI: China’s manufacturing activity expanded for a second straight month, according to a private survey, a further sign of stabilisation after Beijing unleashed a stimulus package to shore up the economy.
The Caixin manufacturing purchasing managers index (PMI) rose to 51.5 last month, the highest since June, according to a statement released by Caixin and S&P Global yesterday.
The median forecast of analysts surveyed by Bloomberg was for an improvement to 50.6 from 50.3 in October.
The findings confirmed that a patchy recovery is taking hold across the US$18 trillion economy.
Official measures of activity in November showed only a slight pickup in the manufacturing sector, while a gauge of construction and services unexpectedly fell back to the level that separates contraction from expansion.
The Caixin results have been largely stronger than those from an official poll over the previous year as exports stayed strong.
The two surveys cover different sample sizes, locations and business types, with the private poll focusing on small and export-oriented firms.
“Exports appear to have remained resilient, as suggested by export container freight prices,” said Bloomberg economists, Chang Shu and David Qu.
“That should support the Caixin manufacturing PMI but is unlikely to offset the unfavourable seasonality for the gauge in November.”
Chinese exports have powered the economy in 2024, with shipments in the first three quarters soaring to the second-highest value on record.
The boom put China on track for a record trade surplus that could reach almost US$1 trillion this year.
But Chinese factories are bracing for uncertainty in the months ahead after President-elect Donald Trump threatened to impose tariffs that could decimate trade between the two nations.
Beijing already faces trade barriers from regions like the European Union.
The PMI for Asia excluding China and Japan was little changed in October, with the index ticking up to 51.6.
While a measure of export orders remained in contraction, it improved by the most since May, potentially signalling a pickup ahead of Trump’s vowed tariffs. A reading above the 50 mark points to growth.
In late September, China delivered forceful cuts to interest rates and unveiled measures to bolster the housing market.
That’s led some analysts to raise their outlook for China’s growth in 2024, bringing the median forecast for this year’s growth to 4.8%, according to estimates compiled by Bloomberg.
In the third quarter, China’s gross domestic product expanded at the slowest pace since the start of 2023.
A prolonged housing slump and a downbeat labour market have weighed on consumption, leaving the economy vulnerable to long-term challenges including rising trade tensions, entrenched deflationary pressure and a shrinking population. — Bloomberg
