CHINA TOPIX

Updated 11:29 AM EDT, Tue, Jun 16, 2020

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China’s Manufacturing PMI Increases for 6th Straight Month in January

China’s Manufacturing PMI.

(Photo : Getty Images. ) China's manufacturing Purchasing Managers' Index (PMI) stood at 51.3 in January.

In yet another sign that the Chinese economy is heading towards recovery, manufacturing activities in China grew for the sixth-straight month in the January.

China's manufacturing Purchasing Managers' Index (PMI) stood at 51.3 in January. Although January's PMI was a tad less than December's 51.4, it was still better than Reuters poll forecast of 51.2.

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The better-than-expected growth rate certainly showed that orders in Chinese factories are steadily improving. The official manufacturing PMI mostly focuses on activities in large factories and industries.    

China's manufacturing sector has been on a buoyant run mostly on the back of the government's extensive spending on infrastructure projects and stimulus packages announced for =key sectors. Analysts also credit rising commodity prices for the strong run of China's manufacturing sector.

Meanwhile, China's non-manufacturing PMI, which takes into account the service sector, stood at 54.6 in January. The PMI was just a tad above 54.5, but well above the standard 50 point mark.

Generally, economists consider anything above the 50 point mark as a sign of expansion, while a reading below the 50 point mark is seen as sign of contraction.

Several economists are still sceptical about whether China's manufacturing and service sector will sustain this growth, arguing that the growth rate may slip down once the effects of the stimulus packages begins to wear down and property prices starts to cool off.

The Chinese economy may also have to endure an uncertain period, at least for some time, under the reign of new US President Donald Trump. Trump was elected to the White House last year after pursuing an explosive election campaign where he constantly targeted China's economic practices.

In fact, the Republican leader sharpened his tirade against China ahead of his official coronation on Jan 20, giving controversial statements on sensitive issues like the South China Sea dispute and One China policy.      

Analyst argue that strain in Sino-US relations will certainly have an effect on Chinese economy, posing a new threat to the world's second largest economy.   

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