China’s factory activity expanded for the fourth consecutive month in February, amid signs of economic recovery and steady growth despite downward pressure and uncertainties, experts said. They expected policymakers to take further steps to shore up growth, including further tax and fee reductions, increased infrastructure spending, and more monetary easing. The official manufacturing purchasing managers index (PMI) came in at 50.2 in February, up from 50.1 in January, the National Bureau of Statistics (NBS) said. The 50-point mark separates growth from contraction. China’s non-manufacturing PMI was 51.6 in February, up from 51.1 in January. The official composite PMI, which includes both manufacturing and services activity, stood at 51.2 in February, compared with 51 in January, according to the NBS. A separate private survey focusing on small and export-oriented businesses also showed that factory activity in February expanded. The Caixin China General Manufacturing Purchasing Managers Index stood at 50.4 in February, up from 49.1 in January.
Wu Chaoming, Deputy Director of Chasing International Economic Institute, attributed the pickup in PMI readings to factors such as the government’s effective measures to stabilize growth, the improvement in demand, and the accelerated structural transformation, and said the PMI readings were likely to continue expanding in March. On the demand front, the NBS said the sub-gauge for new orders rose to 50.7 last month, versus 49.3 in January, thanks to improving market demand following the Spring Festival holiday.
Yang Jinghao, Chief Economist at Concat Data Technology (Hangzhou) Co, said the accelerated manufacturing activity in February points to the resilience of China’s economy amid downward pressure and uncertainties. He also warned of challenges and uncertainties such as the crisis between Russia and Ukraine that may push global commodity prices higher, which could increase the cost pressures on manufacturing enterprises. Yang estimated China’s 2022 economic growth will start low and end high, and the growth may stabilize and recover in the second or third quarter. Luo Zhiheng, Chief Economist at Yuekai Securities, said he expects the manufacturing PMI will reach a new high in the short run, and then fall slightly in the second quarter. For the whole year, Luo estimated China’s economy will grow by around 5.2%, the China Daily reports.
