China's factory activity rebounds after five-month slump
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Official figures reveal a noteworthy turnaround in China's monthly factory activity, marking the first growth in six months.
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Workers assemble toy cars at the production line of Dongguan Da Lang Wealthwise Plastic Factory in Dongguan, China. (AP)
Official figures released on Sunday revealed that monthly factory activity in China experienced growth for the first time in six months. This development presents a positive indication for policymakers aiming to rejuvenate the world's second-largest economy.
In March, the purchasing managers' index (PMI), a crucial gauge of factory production, rose to 50.8, as the National Bureau of Statistics (NBS) reported. This marks an increase from 49.1 in February.
It is worth noting that a PMI reading exceeding 50 signifies an expansion in activity, whereas a reading below 50 indicates a contraction. The last time China's monthly PMI showed expansion was in September, with factory activity consistently in decline since then, as per data from the NBS.
According to a Bloomberg poll, March was expected to see a return to positive territory, albeit at a more modest level of 50.1.
The big picture
Such an uptick is a positive development for Beijing, which has been striving to stimulate economic recovery since relaxing strict COVID-19 control measures in late 2022.
Despite anticipation for a rebound, various challenges persist, including a prolonged crisis in the property sector, elevated youth unemployment rates, and deflationary pressures. Additionally, a global economic slowdown is dampening demand for Chinese goods abroad.
In early March, Beijing announced its ambitious target of achieving five percent annual growth in 2024, a goal that many economists consider challenging.
To spur economic activity, authorities have implemented targeted measures and issued sovereign bonds to bolster infrastructure spending. However, the outcomes of these efforts have been mixed.
Read next: China on path toward stable economic recovery: Global Times
