The mood in China’s manufacturing sector has recently deteriorated significantly. However, according to current surveys among purchasing managers in the industry, the sector remains just on course for expansion. The state purchasing managers’ index published on New Year’s Eve, which refers to state-dominated and large companies, fell by 0.2 points to 50.1 points in December, as the statistics office announced on Tuesday in Beijing. The decline was therefore slightly higher than experts expected.
The indicator published by the business magazine “Caixin” on Thursday surprisingly fell by a full point to 50.5 points in December. Economists had expected a slight increase to 51.7 points. However, both indices are still just above the threshold of 50 points at which statisticians speak of an expansion of activity in companies.
The leading indicator, which is important for analysts and decision-makers, remained above this threshold for the third month in a row. With regard to China’s long stumbling economic development, there are increasing signs of stabilization.
In the non-manufacturing sector, which includes the service sector and the construction industry, the PMI reached 52.2 points in December, significantly higher than analysts had expected.
The world’s second largest economy has long been struggling with a real estate crisis and weak domestic demand. In addition, the export-oriented nation is faced with disputes with important trading partners such as the EU or the USA. Donald Trump will also become the new US President in January, which could mean further tariffs on Chinese products.
In response to the problems, Beijing had already relaxed lending rules or exchange programs. The government also wants to stimulate demand by providing help for people in lower income brackets and improving social security.(dpa)