>

Chinese manufacturing activity expanded in September 2016

Chinese manufacturing activity expanded in September 2016, according to the official measure of the country, which may be a signal that the positive momentum lately continues. The Purchase Managers Index (PMI) remained unchanged at a level of 50.4 points in September, as the data above 50 show growth on a monthly basis. After significant growth in March, the official PMI of China reported a contraction to less than 50 points in July, before again to expand in August.

The Chinese economists are encouraged that the new export orders reported growth in September to 50.1 points from 49.7 points in the previous month. The production has reached to 52.8 points from 52.6 points in August, but the index for all new orders still has shrunk to 50.9 points from 51.3 points.

The sub-index for smaller companies, however, decreased, while the presentation of larger companies is improving. This is a sign that the dependence of large state companies by the government to achieve growth still is not changed.

The economists say that the trend in recent months suggests sustainable economic growth, but increasing dependence on government spending and overheating of the property market may have a greater risk later this year if debt levels continue to rise.

The industrial profits grew by the fastest pace in three years, as rising sales and higher prices stimulate construction boom and overheated real estate market. The profit remains uneven, as traditional heavy industries with overcapacity, such as steel industry, still struggling to achieve growth.

The sectors such as high technology, car manufacturing and shipbuilding showed strong expansion, according to the study. Again lost jobs, but at a slower pace as unemployment sub-index rose to 48.6 points from 48.4 points in August. The industrial overcapacity remains one of the main brakes on economic growth. Beijing promised to hurried pace of reduction in capacity in the industry, especially in steel.

PMI index Markit and Caixin in the manufacturing sector reported expansion from 50 points in August to 50.1 points in September, the expectations of analysts.

more recommended stories