Activity in both China’s manufacturing and services sectors improved in May but remained in contraction. The official manufacturing purchasing managers’ index (PMI) rose to 49.6, from 47.4 in April, according to the National Bureau of Statistics (NBS). A reading above 50 indicates expansion, while a reading below that mark indicates contraction. The May figure was above the market forecast of 48.5. The official non-manufacturing PMI, which measures business sentiment in the services and construction sectors, rose to 47.8 in May from 41.9 in April. The official composite PMI, which includes both manufacturing and services activity, rose from 42.7 in April to 48.4 in May. The figures offer an early insight into the state of the Chinese economy heading into the midway point of the year and the impact of the strict lockdown in Shanghai. Within the official manufacturing PMI, the subindex for production in May rose to 49.7, up from 44.4 in April, while the subindex for new orders rose to 48.2 from 42.6 in April. New export orders, meanwhile, rose to 46.2, compared with 41.6 a month earlier. Within the official non-manufacturing PMI, the construction subindex fell to 52.2 in May from 52.7 in April, while the service subindex rose to 47.1 from 40.
Last month, Premier Li Keqiang instructed more than 100,000 officials from across China to use whatever resources they have to stabilize the economy as the zero-Covid policy remains in effect. Li admitted that China may miss the “around 5.5%” economic growth target set earlier this year, the South China Morning Post reports.
China’s consumer sentiment has fallen to a historic low of 86.7 in April, down from 113.2 in March, according to the National Bureau of Statistics (NBS). It represents a fall below the watershed mark of 100 that separates optimism and pessimism, hitting the weakest level since the data first became available in 1991. The drop of 26.5 from March to April is also the sharpest on record. Premier Li Keqiang poured cold water on growing calls for Beijing to issue direct payments to stimulate domestic consumer demand. He said that any such scheme would prove to be too big in a country of 1.4 billion people, also pointing out that regional development was too unbalanced for the central government to issue direct stimulus payments to all consumers, the China Daily adds.
