ExplainerChina’s economy faces challenges even as it ‘holds steady’: 4 takeaways from August’s PMIs
Analysts said China’s economic momentum held broadly steady in August following the release of the purchasing managers’ indices
1. Mixed manufacturing message
The survey of sentiment among factory owners fell short of a survey by Bloomberg. A reading above 50 typically indicates an expansion of economic activity, whereas a reading below implies a contraction.
“The Caixin manufacturing PMI for August returned to expansionary territory, but the growth was limited. Considering the government’s ambitious annual economic growth target, the challenges and difficulties in stabilising growth over the coming months will be substantial,” said Wang Zhe, senior economist at Caixin Insight Group.
Gabriel Ng, assistant economist at Capital Economics, said the average across the two gauges “rose a touch” from 49.6 to 49.7.
The new exports component, meanwhile, fell to 49 from 49.5 last month.
“At face value, that points to a slowdown in exports. But it is worth keeping in mind that the PMIs have tended to understate the strength of foreign demand in recent years,” Ng said.