China’s manufacturing expands for first time in 6 months in latest sign of stabilising economy

Official manufacturing purchasing managers’ index rose to 50.2 in September from 49.7 in August

But factory activity still faces headwinds from intense competition, costly raw materials and tight funds, says statistics bureau economist

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China’s industrial profits rose year-on-year in August after months of declines. Photo: AFP

Published: 12:03pm, 30 Sep 2023Updated: 11:26am, 10 Oct 2023

China’s manufacturing activity rebounded to expand for the first time in six months, another sign of a stabilising economy following a slew of policy support measures to boost growth.

The official manufacturing purchasing managers’ index (PMI) rose to 50.2 in September from 49.7 in August, the National Bureau of Statistics said on Saturday.

It was the first time since March the headline reading has risen above 50, which indicates expansion of production from the previous month, having remained in the contraction range in the previous five months.

“Positive factors in economic performance have increased in September as policies have started to take effect,” said Zhao Qinghe, an economist with the statistics bureau.

But he cautioned that headwinds could hamper a continued rebound in the manufacturing sector.

“The survey showed a rise in the proportion of manufacturing factories reporting intensified competition, high costs of raw materials and tightness in funds. The recovery and development of the manufacturing sector still face some difficulties,” Zhao said in a separate statement on the NBS website.

He added that the government should strengthen implementation of support policies to consolidate the recovery.