BEIJING • China’s official factory gauge rose to a five-year high, signalling that efforts to clean up the financial sector and the environment aren’t damping economic growth yet.
The manufacturing purchasing managers’ index (PMI) rose to 52.4 in September, compared to a projected 51.6 in Bloomberg’s survey and 51.7 in August. The non-manufacturing PMI stood at 55.4 compared to 53.4 a month earlier. A private-sector gauge, the Caixin manufacturing PMI, slipped to 51.0 from 51.6. For both, numbers higher than 50 indicate improving conditions.
The world’s second-largest economy has shown signs of cooling after posting faster than expected expansion of 6.9% in both of the first two quarters of the year. The impact of a government drive to cut excess capacity in sectors such as steel and shut polluting industries is being felt in the second half, and may colour discussion of economic policy at the Communist Party Congress from Oct 18.
“This showed that China’s growth engine is still strong despite the cooling economic activity we saw in July and August,” said Wen Bin, an economist at China Minsheng Banking Corp in Beijing. “As an early indicator, the PMI readings should show that economic restructuring is making positive impact.”
New growth drivers such as high-end manufacturing are gaining momentum, the National Bureau of Statistics (NBS) said in a statement. Consumption manufacturing being boosted ahead of week-long Autumn holidays in early October, NBS said PMI for large manufacturers rose to 53.8, up one percentage point from August, and PMI for smaller producers climbed 0.3 percentage point to 49.4 from August, NBS said. The new orders index jumped to 54.8 in September from 53.1 in August. — Bloomberg