September 27, 2020

Chinese Manufacturing Data Suggests Muted Recovery

HONG KONG — A survey of manufacturing activity in China on Thursday provided more reassurance that the Chinese economy, buoyed by somewhat improved global trade and a string of government stimulus measures last year, has settled into a muted recovery.

The reading of the purchasing managers’ index, published by the British bank HSBC, rose to 51.9 in January from 51.5 in December. It was the fifth consecutive improvement in the monthly index, and took the number to its highest level in two years.

The early version of the HSBC index, which is based on about 90 percent of the survey results, provides one of the earliest insights into the world’s second-largest economy each month, and is thus closely watched by analysts and investors.

“The upbeat manufacturing PMI reading heralds a good start to China’s economic growth into the New Year,” commented Qu Hongbin, chief China economist for HSBC, in a note accompanying the data release. While export growth was likely to remain tepid, he added, infrastructure construction was regaining momentum, and companies had started to step up hiring and manufacturing again.

The reading underlined a picture that has been crystallizing since last year: That the years of double-digit growth are a thing of the past, and that China’s economy has, for now, settled into a more modest pace of expansion.

Data released last week showed that the Chinese economy expanded just 7.8 percent last year — from 9.3 percent in 2011 and 10.4 percent in 2010.

The last few months have shown an improvement as government-mandated measures aimed at propping up growth filtered through to the economy.

But that recovery has been modest. The January HSBC index released Thursday, for example, was just 4.3 points higher than its last trough in August, Mr. Qu noted. By comparison, the rebound of 2009 saw the index jump more than 9 points in just five months.


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