EditorialAll signs point to an economic recovery

The non-manufacturing purchasing managers’ index (PMI) – a measure of sentiment in the services and construction sectors – rose to a four-month high of 56.3 in March, above analysts’ median expectations of 52. A reading above 50 indicates growth in sector activity. The manufacturing PMI – a survey of sentiment among factory owners – rose to a three-month high of 51.9 in March from 50.6 in February, again above predictions. Perhaps more important, a breakdown of the figures reveals that the PMI for advanced manufacturing is rising at a faster pace than the general factory-owners’ index, evidence that an industrial upgrade is making progress. This is pivotal to President Xi Jinping’s dual circulation economic strategy, under which domestic consumer activity shoulders a bigger role in growth and reduces reliance on exports.

The National Bureau of Statistics said that as pandemic controls were consolidated, consumer demand continued to be released. That said, it remains premature to assume that China will achieve Beijing’s growth target this year of “above 6 per cent” announced recently by Premier Li Keqiang, because it remains dependent on continued economic recovery. But, coming soon after the country’s main political meetings and the Spring Festival, the data seems to suggest China’s economy is improving. There are still a lot of uncertainties, but IMF managing director Kristalina Georgieva says the global economy is on “firmer footing” and headed to a quicker-than-expected recovery.

Soon the US and Europe will reach a critical stage in their Covid-19 vaccination campaigns, easing brakes on their economies. Along with a massive US economic stimulus package, it all adds to optimism that the global economy will fare better this year.