China’s official PMI rose to 50.8 in May from 50.6 in April, data showed on Saturday, beating market expectations and raising optimism that the world’s second-largest economy may be stabilising.
Investors will get a fuller picture of the Chinese economy on Monday when the official services PMI is released along with the final HSBC survey that focuses on smaller private sector firms in the country.
The official purchasing managers’ index (PMI), issued by the National Bureau of Statistics and China Federation of Logistics and Purchasing, indicated activity in China’s vast manufacturing sector picked up slightly in May.
The reading was stronger than market expectations of 50.1 in a Reuters poll.
A reading above 50 indicates expanding activity while a reading below that level points to a contraction.
“The slight pick-up in May PMI reinforces signs of stabilising of the economy,” Zhang Liqun, an economist at the Development Research Centre, a top government think tank in Beijing, said in an e-mailed statement accompanying the index.
China’s annual economic growth slowed to 7.7 per cent in the first quarter from 7.9 per cent in the previous quarter, despite a credit boom fuelled by the thriving shadow financing.