Caixin manufacturing PMI rises in Nov as orders grow amid US trade war

By Song Lin and Yang Kunyi Source:Global Times Published: 2019/12/2 20:38:40

A view of a clothing manufacturing plant of Xinjiang Jinliyuan Clothing Co in Aksu, Northwest China's Xinjiang Uyghur Autonomous Region on Wednesday Photo: Li Xuanmin/GT

China's factory activity expanded more than expected in November, as the private Caixin/Markit manufacturing purchasing managers' index (PMI) rose to its highest level in almost three years. 

Experts said that the trend reflects increasing domestic and international orders and a general upgrade in the economy, and manufacturing will further look up if China-US trade relations improve. 

The Caixin manufacturing PMI hit 51.8 in November, up from 51.7 in October, and exceeded the expected 51.4. November marked its highest readout since 2017, after four consecutive months of increases. 

A reading above 50 indicates expansion, while a number below 50 falls into the contraction range.

Manufacturing activity has been improving as global and domestic demand rises, Liu Xuezhi, a senior economist at the Bank of Communications, told the Global Times.

Domestic demand elevated in the third quarter, Liu said, adding that the performance of export-oriented manufacturing has resumed to some extent thanks to the positive signals of China-US trade talks.

The PMI in the coming months is expected to keep in expanding area, though it may not surge given that the downward pressure on the world economy persists, Liu said.

The increasing manufacturing activity shows that the effects of a new economic driving force have been kicking in, Cong Yi, a professor at the Tianjin University of Finance and Economics, told the Global Times on Monday.

Though China is still in a tough phase of industrial upgrading, its new industries are growing with great momentum, and will set an example of innovative development for other industrial sectors, Cong said, noting that November's PMI is a positive indicator for anticipated investment from both domestic and overseas sources.

The rising Caixin manufacturing PMI is in line with the earlier PMI released by the National Bureau of Statistics on Saturday, which also returned to the expansion range. Both indicators suggest an overall improvement in production of China's manufacturing sector.


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