xi's moments
Home | Macro

Economic recovery gains momentum in September

By FAN FEIFEI and OUYANG SHIJIA | chinadaily.com.cn | Updated: 2022-09-30 22:37

A worker at an automated workshop in Huzhou, Zhejiang province, checks lithium battery products in a factory. [Photo/Xinhua]

China's factory activity returned to expansion territory in September as production and new orders increased, reflecting that the nation's economic recovery is gaining momentum amid a better COVID-19 situation domestically and intensified macroeconomic policy support, officials and experts said.

Their comments came as the official purchasing managers index for China's manufacturing sector came in at 50.1 in September, up from 49.4 in August, data from the National Bureau of Statistics showed on Friday.

A PMI reading above 50 indicates expansion, while a reading below that number reflects contraction.

The subindex for production stood at 51.5 in September, up 1.7 points from the previous month. Demand continued to increase as the subindex for new orders rose 0.6 points from August to 49.8, the NBS said.

"As supportive measures of stabilizing the economy continued to take effect in September and the negative effects of heat waves waned, manufacturing PMI has bounced back to expansion territory," said Zhao Qinghe, a senior statistician with the NBS.

Zhou Maohua, an analyst at China Everbright Bank, attributed the improvement to the production expansion and recovering domestic demand, with the gradual normalization of economic operations and a package of stimulative economic policies.

The government's recent steps to stabilize prices, ease enterprises' burdens and enhance financial support are conducive to alleviating the pressure of high costs on manufacturers, and the sector will likely expand at a faster pace in the following months, Zhou said.

China's nonmanufacturing PMI was at 50.6 in September, down from 52.6 in August, said the NBS. The service sector was weaker in September, as the pandemic and other factors weighed on market activities. The subindex for business activities declined 3 percentage points from last month to 48.9.

Zhao said the decline is a result of tepid performance in consumer services fields including retailing, aviation, transportation, hospitality and catering, with the subindex for business activities in these segments slipping into contraction territory.

Warning of downward pressures and uncertainties both at home and abroad, experts expect further fiscal and monetary easing to stimulate the economy, such as proactive infrastructure spending, and supportive credit to manufacturing and real estate.

Despite the contracted services sector, the construction sector continued its expansion in September, with the subindex for business activities in the sector reaching 60.2, 3.7 percentage points higher than that in August, the NBS said.

Growth in infrastructure investment has sped up for two consecutive months, and the country has accelerated the push to promote the construction of key projects through offering financial guarantees, which will play a vital role in boosting effective demand, Zhou said, adding that China's economic recovery is expected to gather pace significantly in the remaining months of the year.

"Heightened efforts should be carried out to further implement a series of stimulus packages and follow-up measures, especially making full use of the policy-backed and developmental financial tools, and relending and financial discount policy for equipment renewal to bolster the domestic demand," said Wen Bin, chief economist at China Minsheng Bank.

The country should step up the push to ensure the smooth operation of logistics, and guarantee the stable supply of coal, electricity and other energy sources, in a bid to further consolidate the foundation for economic recovery and keep economic performance within a reasonable range, Wen said.

Contact the writers at fanfeifei@chinadaily.com.cn

Global Edition
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349