China’s economic recovery clouded by zero-Covid even as manufacturing, services expand for first time in 4 months

Official manufacturing and non-manufacturing purchasing managers’ indices (PMI) rose in June, both returning to expansion for the first time since February

But concerns remain after President Xi Jinping said China cannot afford to relax its zero-Covid strategy at the cost of short-term economic growth

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China’s official non-manufacturing purchasing managers’ index (PMI), which measures business sentiment in the services and construction sectors, rose to 54.7 from 47.8 in May. Photo: EPA-EFE

Published: 9:37am, 30 Jun 2022Updated: 6:00pm, 30 Jun 2022

China’s economic recovery continued in June, but the resilience will continue to be tested by the possibility of future coronavirus control measures after Beijing reaffirmed its zero-tolerance strategy, analysts said.

The official manufacturing purchasing managers’ index (PMI) rose to 50.2 in June, up from 49.6 in May, marking the first time since February that the gauge has risen above the 50 mark that separates expansion from contraction, data released on Thursday showed.

The official non-manufacturing PMI, which measures business sentiment in the services and construction sectors, also rose to 54.7 from 47.8 in May, also expanding for the first time since February. It is also the fastest pace the sector has expanded in 13 months since the index hit 55.2 in May last year.

The official composite PMI, which includes both manufacturing and services activity, also rose from 48.4 in May to 54.1 in June.

“June returning to expansionary territory showed businesses had obviously positive changes from May,” said senior National Bureau of Statistics statistician Zhao Qinghe.