Recent stimulus may have started to boost growth momentum. Still-weak export orders weigh on manufacturing activity China's factory activity unexpectedly expanded after five months of contraction, suggesting recent stimulus efforts may have started to boost growth momentum.
The official manufacturing purchasing managers' index rose to 50.1 in October from 49.8 last month, the National Bureau of Statistics said on Thursday. That was above the 50-mark separating expansion and contraction from the previous month, and compared with a median forecast of 49.9 by economists surveyed by Bloomberg News.
A gauge of non-manufacturing activity in construction and services rose to 50.2 from 50 last month, the statistics office said. That compared with a forecast of 50.3.
The PMI survey provides the first official economic indicator for the month after China unveiled its boldest stimulus package since the pandemic.
"China's economic activity continued to pick up and improve in October, as a new package of policy measures was rolled out and existing policies began to gradually take effect," Zhao Qinghe, a senior statistician at the NBS, said in a statement.
The offshore yuan edged down 0.1% in morning trade. The yield on China's 10-year government bond held steady at 2.16%.
A measure of output activity below the manufacturing PMI rose to 52, the highest in six months, while overall new orders were steady. But new export orders remained weak and continued to contract, falling slightly to 47.3.
The stimulus boost could help the world's second-largest economy meet its official expansion target of around 5% for this year. The economy expanded at its slowest pace in six quarters in the three months ended in September, although there were early signs of a pick-up in consumption in the final weeks of the period. The housing market collapse has taken a toll on consumer appetite, and the economy faces longer-term challenges including rising trade tensions, deep-rooted deflationary pressures and a shrinking population. A measure of consumer confidence fell in September to its lowest level since 2022.
While the latest measures may not be enough to reverse the deflationary trend, some economists say they are a welcome shift in Beijing's stance to show greater urgency in halting slowing growth.
Source: Bloomberg
