Summary
Recent figures from the National Bureau of Statistics (NBS) indicate that China’s economy bounced back in September 2023, with robust growth across various sectors. The manufacturing industry and retail sales, in particular, have spearheaded this impressive recovery.
The latest figures from the National Bureau of Statistics (NBS) suggest that China’s economy has shown promising signs of recovery in September 2023, with growth across various sectors, particularly in the manufacturing industry and retail sales. These developments are a welcome indication of progress, and it will be interesting to see how they continue to unfold in the future.
Key Points
- China's Manufacturing PMI: Climbed to 50.2 in September, moving from contraction to expansion for the first time since April
- Non-Manufacturing PMI: Stood at 51.7, up 0.7 percentage points from August
- Industrial Profits: Increased by 17.2% YoY in August, after a 6.7% drop in July
- Retail Sales of Consumer Goods: Rose by 4.6% YoY in August, a jump from 2.5% in July.
- Order and Production Indices: Reached 50.5 and 52.7 respectively, indicating positive market demand and productive capacity
The National Bureau of Statistics (NBS) has recently released key economic data for September 2023, indicating a robust and promising outlook for China’s economy. The data suggests a resurgence in various sectors, with the manufacturing industry and retail sales leading the way. These positive developments reflect the country’s resilience and potential for growth and are a welcome indication of progress. It will be of interest to monitor these trends in the coming months to gain a better understanding of China’s economic trajectory.
Manufacturing Sector: The Bedrock of Economic Expansion
As of September 2023, the purchasing managers’ index (PMI) for China’s manufacturing sector stands at 50.2. This is not just a number; it represents the first time since April that the PMI has risen above 50—a clear indication of economic expansion. The index had been languishing below the pivotal 50 mark for four consecutive months, reflecting a state of contraction. However, with favorable policies gradually taking effect, the sector has managed to bounce back, driving the growth of China’s overall economic prosperity.
Non-Manufacturing PMI: A Rising Tide
Simultaneously, the non-manufacturing PMI was also in the spotlight, recording a figure of 51.7 for September. This figure is notably 0.7 percentage points higher than the previous month, again indicating an economic expansion.
Financial Constraints in China: Easing Policies
A slew of favorable policies targeting key sectors, including manufacturing and real estate, have helped stabilize market expectations. The Chinese government has been proactive in its counter-cyclical adjustments, recently cutting the financial institution reserve requirement ratio for the second time this year, aiming to keep liquidity reasonably ample.
Retail Sales: The Bright Spot of Consumption
In addition to the manufacturing and non-manufacturing sectors, consumption has emerged as a bright spot in the country’s economic performance. Retail sales of consumer goods—a major indicator of consumption strengths—rose by 4.6% year-over-year in August, marking a significant increase from the 2.5% expansion in July.
Industrial Profits: The Turnaround
August witnessed a remarkable turnaround in industrial profits, another key economic indicator. Profits in companies with annual revenues of at least 20 million yuan jumped by 17.2% year-over-year, after a slump of 6.7% in July. This stark reversal signals the dawn of economic recovery, substantiated by the rising figures in China’s global supply chains and high-tech industries.
Market Demand in China and Economic Momentum
Notably, the sub-index measuring market expectations remained in the high-climate zone, echoing the sentiments of a stable business outlook. Further supporting this is the new order index for the manufacturing sector, which edged up to 50.5, and the production index, which surged to 52.7, both suggesting that market demand in China is improving and that businesses are expanding at a faster pace.
