China's March manufacturing PMI climbs to highest in 2021 as global economic recovery drives up orders
Published: Mar 31, 2021 10:38 AM
Industry PMI Photo:VCG

Industry PMI Photo:VCG

China's March official manufacturing Purchasing Managers' Index (PMI) expanded to the highest level this year after a slight dip in the previous month, data from the National Bureau of Statistics (NBS) showed, indicating a recovery of the manufacturing sector as domestic consumption climbed and global demands rose. 

The country's manufacturing PMI stood at 51.9 percent in March, up 1.3 percentage points compared with 50.6 percent in February. In January, the PMI stood at 51.3. China's manufacturing sector has now remained in expansion territory for 13 months in a row.

The NBS data also showed anoverall positiverecovery regardless of industries or scale of the companies. Of the 21 monitored manufacturing industries, 17 saw their PMI in the expansion territory. Industries like professional equipment and nonmetallic mineral products all recorded a New Order Index above 55 percent, reflecting a fast recovery. In total, the New Order Index rose by 2.1 percentage points from February to 53.6 percent in March, showing the country's fastening steps in manufacturing production. 

Other economic data also showed booming economic activities in China's manufacturing sector recently. For example, China's sales of excavators, a basic manufacturing tool, had set a historical record in February, about 38 percent higher than the previous record in February 2011, according to media reports. 

Experts have mostly attributed the booming manufacturing sector to a general rebound within the economy, which is a strong lift on China's exports sector.

"Overseas markets, particularly the US' stimulus plans which resulted in price inflation, are driving up demands. China, with its strong manufacturing capabilities, is benefiting from such a trend," Tian Yun, vice director of the Beijing Economic Operation Association, told the Global Times. 

Wu Chaoming, chief economist at Chasing Securities, also said that China's continued recovery of demands in manufacturing investment and domestic consumption is beneficial to strengthening production activities and demand-supply interaction. 

According to the NBS data, China's New Export Orders Index rose 2.4 percentage points in March compared with February, while the imports index has risen to 51.1 percent, a new high in recent years. 

Tian said that based on the current order situation, the trend of manufacturing boom will sure to continue in the first half of this year, while in the second half year some uncertainties will increase such as whether the US will move to stop China "riding the wave" of the US economic drive.

"However, in general, as long as the global inflation exists, China's exports won't slow down because of China's strong supply abilities," Tian said, adding that the US' infrastructure plan also creates business opportunities for Chinese raw material suppliers. 

Wu also anticipated that China's PMI will remain in expansion territory throughout the year of 2021, with help of global economic recovery and rising consumption demand domestically.

Apart from the manufacturing sector, the sub-index for the service sector business activity also rose by 4.4 percent points monthly to 55.2 percent in March, showing that China's services industry is speeding up recovery following successful control of the pandemic. 

But Tian stressed that considering China didn't roll out strong fiscal policies recently, the government still has worries about economic overheating. Therefore, domestic infrastructure investment will relatively be restrained this year to control leveraging.