The purchasing managers' index (PMI) for China's manufacturing industry rose to 50.1 in October, marking a return to expansion territory from 49.8 in September after five months of contraction, aided by the introduction and implementation of incremental pro-growth policies to bolster the economy, the National Bureau of Statistics (NBS) said. A reading above 50 indicates an expansion in manufacturing activity, while a number below 50 signals a contraction. The 50.1 reading also beat the 49.9 forecast of a Reuters poll. The manufacturing PMI has now rebounded for two consecutive months, while key indicators showed steady improvement, which have bolstered market expectations.
The manufacturing sector's return to recovery in October offered a good start for the economy in the fourth quarter, Zhou Maohua, Economist at China Everbright Bank, told the Global Times. Zhou said that he expected the momentum to be sustained thanks to various favorable factors, such as large-scale equipment upgrades and trade-ins of consumer goods, the steady expansion of the high-tech equipment manufacturing industry, and an expected acceleration in domestic consumption and investment bolstered by the incremental policies. Wang Peng, Associate Research Fellow at the Beijing Academy of Social Sciences, highlighted the optimization of the policy environment, growing market demand, accelerated industrial upgrading and improved supply chain stability as the major advantages to aid the recovery of the manufacturing sector.
The sub-index for production and business expectations stood at 54.0, an increase of 2.0 percentage points from September, remaining at a four-month high, which indicated that business confidence has increased as the positive factors driving the economic upturn increase cumulatively, NBS Statistician Zhao Qinghe said. Manufacturing continued to gain pace, with the relevant index reaching 52.0, a 0.8 percentage point rise from September, while the new orders index climbed back into expansion territory to reach 50.0. The non-manufacturing PMI as well as the composite PMI in October also rebounded above the 50-point mark, with the non-manufacturing PMI reaching 50.2 and the composite PMI standing at 50.8, the Global Times reports.
China's electricity consumption, a key barometer of economic activity, increased by 7.9% year-on- year in the first three quarters, according to the China Electricity Council. Electricity consumption in the high-tech and equipment manufacturing sectors grew 11.4% year-on-year during the period, a 1.3 percentage point increase from the same period last year. Electricity consumption for internet data services also increased 24.4% year-on-year during the first nine months. The rapid growth of electric vehicles, meanwhile, led to a 56.7% year-on-year increase in electricity consumption for charging and battery swapping services, the China Daily adds.
