Industrial activity in China records first growth in March after six months

China's industrial activity exceeded expectations in March, the event marked the industry's first growth since September 2023, which increased the country's optimism of achieving its growth objective of approximately 5% this year.

New data released

Last Sunday, government data was released revealing that the manufacturing Purchasing Managers' Index (PMI) recorded a five-month contraction in March, and which surprisingly indicated the highest level recorded in a year. These figures exceeded market expectations, which reinforces the growing evidence that the country's industrial sector is gaining momentum towards an economic recovery.

The National Bureau of Statistics also announced on Sunday that the official purchasing managers index (PMI) for the manufacturing sector reached 50.8, the highest reading in a year. This news presents a significant boost to policymakers seeking to restore confidence in the world's second largest economy. The PMI rise follows faster industrial production in the months of January and February, as well as an increase in exports during this two-month period.

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Growth expectation for the year 2024

The latest data indicates that the country's industrial capacity could play a crucial role in helping the government achieve its annual growth target of around 5% this year. This occurred during a complicated phase in Beijing due to a crisis in the real estate market and geopolitical tensions that have been impacting China recently.

Pinpoint Asset Management's chief economist, Zhang Zhiwei, told The Business Times that he believes the industrial sector appears to be resilient, mainly due to its strong exports and that if fiscal spending increases and exports remain strong, economic dynamics should improve too.

Featured photo: Photo of Shanghai with the Chinese flag (Reproduction/Eternity in an Instant/Getty Images)