PMI Photo:VCG

China’s official manufacturing Purchasing Managers’ Index (PMI) in August rebounded slightly from last month’s level to stand at 49.4, data from the National Bureau of Statistics (NBS) showed on Wednesday, as economic stimulus policies gradually take effect, but factory activity was slightly held back resulting from power rationing, COVID-19 flare-ups and other factors. 

China’s official manufacturing PMI edged up to 49.4 in August, up 0.4 percentage points compared with July’s level, NBS data showed.

The PMI level beat previous market expectations. A Reuters poll had placed expected PMI at 49.2. 

Some key industries maintained an expansionary trend in August with supportive policies. For example, consumption PMI rose to 52.3 percent in August, up 0.9 percentage points compared with the previous month, NBS data showed. 

According to NBS senior statistician Zhao Qinghe, the Chinese economy continued a trend toward recovery and development, as domestic regions and departments  implemented the decisions and arrangements by the central government and the State Council, while companies addressed adverse factors like coronavirus and extreme hot weather. 

Wu Chaoming, deputy head of the Chasing Research Institute, said that infrastructure investment had recovered to some extent recently as effects of stimulus policies gradually manifest. But emerging negative factors including hot weather-triggered power rationing still weighed on production recovery, he said. 

China’s factory activity has contracted for the second consecutive month. The 50-point mark normally separates contraction from growth. 

Some experts also noted that the property market’s lingering weakness, whether in terms of project start rate or sales, had exerted burden on upper and downstream industries. The manufacturing sector’s recovery was also hindered by the spread of coronavirus into some industrial hubs in August, they said. 

Global Times