China Manufacturing Index Returns to Expansion Land
September 01 2016 - 12:10AM
Dow Jones News
BEIJING—China's bloated industrial sector showed surprising
signs of strength last month, though economists expect the energy
to fade.
The official manufacturing purchasing managers' index, a gauge
of factory activity, rose to a 22-month high of 50.4 in August, the
National Bureau of Statistics reported Thursday.
The median forecast of 12 economists polled by The Wall Street
Journal was that the August figure would match July's 49.9.
Instead, the index returned to expansionary territory—a reading
above 50; below 50 indicates contraction.
Recent rises in commodities prices and a heating-up property
market likely explain part of the improvement, economists said.
Subindexes measuring new orders and production moved up, the
statistics bureau said.
The more energetic reading comes after months of data points
showing torpor or, at best, sending mixed signals about the world's
second-largest economy.
Markets reaction was muted, with Hong Kong's Hang Seng Index
climbing Thursday morning while trading see-sawed in Shanghai.
Recent economic data from China have been particularly
confusing, said Jianguang Shen, an economist of Mizuho Securities.
"I don't think August's real economic condition is as strong as
official data showed," he said.
A separate, private gauge of manufacturing activity, the Caixin
China manufacturing purchasing managers' index, dropped to 50.0 in
August from 50.6 in July, Caixin Media Co. and research firm Markit
said Thursday.
The official PMI for nonmanufacturing companies, also released
Thursday, edged down to 53.5 in August from 53.9 in July.
The Caixin index tends to give more weight to activity in
smaller, private companies while the official PMI focuses on larger
state companies.
Mr. Shen and other economists said downward pressure on overall
economic growth is still increasing as earlier government stimulus
measures wane.
Zhang Fan, an economist of RHB (China) Investment Bank, said
while the official PMI reading came in high, "I don't think it will
last long."
The stronger factory reading comes despite Beijing's efforts to
reduce pollution by shutting down factories. To ensure that the sky
appears clean and blue during the Group of 20 summit of major
economies this weekend in the eastern city of Hangzhou, Chinese
authorities are ordering hundreds of factories in five provinces to
stop working.
"It's a widespread government campaign. There's no way it won't
affect factories' operations," said Mizuho's Mr. Shen.
Liyan Qi and Grace Zhu
(END) Dow Jones Newswires
August 31, 2016 23:55 ET (03:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Hang Seng Bank (PK) (USOTC:HSNGY)
Historical Stock Chart
From Mar 2024 to Apr 2024
Hang Seng Bank (PK) (USOTC:HSNGY)
Historical Stock Chart
From Apr 2023 to Apr 2024