BEIJING: China’s economic momentum firmed up last month as manufacturing activity resumed expansion for the first time in half a year, adding to signs that the economy has bottomed out and may recover steadily in the fourth quarter, experts said.
Nevertheless, continuous policy support is still crucial, given the sustained difficulty of small businesses, they said, with monetary policy to remain accommodative and additional government spending likely in the rest of the year.
The comments came after the National Bureau of Statistics said on Saturday that the official purchasing managers index for the manufacturing sector came in at 50.2 in September, standing above the boom-bust line of 50 for the first time in six months and rising for the fourth consecutive month. September’s PMI reading was up from 49.7 in August because production accelerated while market demand improved, especially export orders, the bureau said.
The improved reading has further bolstered analysts’ confidence in China’s recovery prospects, following a raft of encouraging data for August, when the profits of industrial enterprises and consumer inflation both resumed positive growth on a year-on-year basis.
“The pace of China’s economic rebound has stabilized and is moving upward,” said Zhong Zhengsheng, chief economist at Ping An Securities. Zhong said September’s PMI indicates that the drag from external demand has eased, policy pushes for infrastructure and real estate construction have promoted a recovery in related industries, and the mitigated debt burden of households is boosting the sectors of consumer goods and services. –The Daily Mail-China Daily news exchange item
