Factories on the march as china recovers

Economic recovery in China is powering ahead, with factory output expanding at its fastest pace in almost a decade. The Caixin/Markit manufacturing purchasing managers’ index rose from 53 to

53.6 in October. It is the sixth consecutive month that the index has registered above the 50 mark that signals growth. The release of the figures came days after China’s official

purchasing managers’ index, which is based on larger, state-owned enterprises, recorded its eighth consecutive month of expansion. That index measured 51.4 for October. While western

economies are battling a resurgence in Covid-19 and are subjecting their economies to further lockdowns, China is likely to end the year with an even bigger economy than it had at the start.

Economists at the International Monetary Fund expect annual growth of 1.9 per cent, which puts China way ahead of its rivals. Although the pandemic paralysed huge swathes of China’s economy

early this year, it rebounded quickly thanks to a state-driven infrastructure boom. Advertisement At first, industrial production supported the recovery, while the services sector lagged

behind in the summer. However, the recovery is becoming more broadly based now that employment and consumer confidence are rising once more. “Recovery was the word in the current macro

economy, with the domestic epidemic under control. Manufacturing supply and demand improved at the same time,” Wang Zhe, senior economist at Caixin Insight Group, said. The Caixin survey

showed that total new orders had risen to their highest since 2010 and exports also had increased, albeit at a lesser pace than the previous month. Chinese factories hired workers for a

second month in a row and business confidence hit new highs.