Rebound in China
The PMI bounced back to 50.2 in November, its highest since March
- Published 1.12.19, 1:14 AM
- Updated 1.12.19, 1:14 AM
- a min read
Factory activity in China unexpectedly returned to growth in November for the first time in seven months as domestic demand picked up on Beijing’s accelerated stimulus measures to steady growth.
But gains were slight, and export demand remained sluggish. More US tariffs are looming within weeks and Beijing and Washington are still haggling over the first phase of a trade deal.
With China’s economic growth cooling to a near 30-year low and industrial profits shrinking, speculation is mounting that Beijing needs to roll out stimulus more quickly and more aggressively, even if it risks adding to a pile of debt.
The Purchasing Managers’ Index (PMI) bounced back to 50.2 in November, its highest since March, China’s National Bureau of Statistics (NBS) said on Saturday, above the 50-point mark that separates growth from contraction on a monthly basis.
The result compared with 49.3 in October. A Reuters poll showed analysts expected the November PMI to come in at 49.5.
The official factory gauge pointed to an improvement in China’s vast manufacturing sector last month.
Total new orders bounced back to expansionary territory with the sub-index rising to 51.3, the highest level seen since April. That indicates domestic consumption firmed up after Beijing repeatedly urged local governments to kick stimulus up a gear to meet economic goals before year-end. Factory output also rose to 52.6 in November, marking the strongest pace since March.
“In the short term, we may have already passed the low point where the economy hit the bottom,” Zhang Deli, a macro analyst with Lianxun Securities, wrote in a note.