ALBAWABA – Surveys indicate that China’s manufacturing sector picked up pace in May, or at least stabilised production, compared to April, according to Bloomberg.
Data suggesting the manufacturing sector in China has improved provides some reprise after signs of a slowdown in the economic recovery of the Asian giant economy.
China Beige Book, a US-based data provider, said its surveys show manufacturing output increased “notably” in May from April, Bloomberg reported.
Domestic and foreign demand, and purchase orders, have also improved, the Beige Book confirmed.
Separately, Goldman Sachs Group Inc. reported an increase in the emerging industries purchasing managers’ index.
“It’s still too early to put a nail in the coffin of the post-Covid Zero recovery,” China Beige Book said in a statement carried by Bloomberg.
“Manufacturing activity defied rumors of demise, though soft demand from Western economies remains a major headwind,” the statement said.
The statement also highlighted a rise in revenue and profit margins for Chinese manufacturers, as well as the service and retail sectors, in May 2023, from April.
China Beige Book’s data was based on a survey of about 1,000 Chinese firms and was conducted between May 18 and May 25, 2023.
Economists are closely watching Chinese economic releases after April’s data widely missed forecasts.
Bloomberg said that the data caused several investment banks to downgrade their projections for China’s GDP growth this year closer to the government’s official target of about 5 percent.
Investors have turned more bearish on Chinese stocks, with the Hang Seng China Enterprises Index dropping about 20 percent from its January 27 peak, according to the New York-based news outlet.
Robin Xing, chief China economist at Morgan Stanley, was optimistic about China’s growth trajectory for 2023, despite softer data last month.
“I would see recent April data weakness as a hiccup,” he said in an interview with Bloomberg TV.
“As we have witnessed in other Asian economies who didn’t use paychecks or fiscal transfers to jump start the recovery, the recovery takes time because you need the service sector to recreate jobs,” Robin said.
