The purchasing managers' index (PMI) for China's manufacturing industry, which gauges activity in the sector, rose to 50.1 in October, marking a return to expansion territory from 49.8 in September after five months of contraction, aided by the introduction and implementation of incremental pro-growth policies to bolster the economy and the gradual impact of existing policies as economic sentiment continued to improve, the National Bureau of Statistics (NBS) said on Thursday.
A reading above 50 indicates an expansion in manufacturing activity, while a number below 50 signals a contraction. The 50.1 reading also beat the 49.9 forecast of a Reuters poll.
The manufacturing PMI has now rebounded for two consecutive months, while key indicators showed steady improvement, which have bolstered market expectations.
The manufacturing sector's return to recovery in October offered a good start for the economy in the fourth quarter, Zhou Maohua, an economist at China Everbright Bank, told the Global Times on Thursday.
Zhou said that he expected the momentum to be sustained thanks to various favorable factors, such as large-scale equipment upgrades and trade-ins of consumer goods, the steady expansion of the high-tech equipment manufacturing industry, and an expected acceleration in domestic consumption and investment bolstered by the incremental policies.
Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, highlighted the optimizing policy environment, growing market demand, accelerated industrial upgrading and improved supply chain stability as the major advantages to further advance the recovery of the manufacturing sector.
The sub-index for production and business expectations stood at 54.0, an increase of 2.0 percentage points from September, remaining at a four-month high, which indicated that business confidence has ratcheted up as the positive factors driving the economic upturn increase cumulatively, Zhao Qinghe, an NBS statistician said.
Manufacturing production continued to gain pace, with the production index reaching 52.0, a 0.8 percentage point rise from September, while the new orders index climbed back into expansion territory to reach 50.0.
The non-manufacturing PMI as well as the composite PMI in October also rebounded above the 50-point mark, with the non-manufacturing PMI reaching 50.2 and the composite PMI standing at 50.8, the NBS data showed.
"The package of incremental policies will inject new vitality into the economy and promote stable growth through measures in a wide range of areas, which will help reduce enterprises' costs, improve productivity and enhance market competitiveness," Wang told the Global Times on Thursday.
The National Development and Reform Commission, China's top economic planner, vowed in October that it will ramp up efforts to introduce a package of incremental pro-growth policies, including an emphasis on scaling up macro counter-cyclical adjustment measures, boosting domestic consumption and shoring up the capital market - among others - as part of the concerted efforts to promote economic growth.
Source: Global Times
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