The output of enterprises in China continues to grow

China’s non-manufacturing purchasing managerial index (PMI) and comprehensive PMI remained above the expansion area in May, indicating that China’s overall economic output continued to grow, while enterprise output and business activities maintained the recovery momentum, data released by the National Bureau of Statistics (NBS) on Friday.

The non-manufacturing PMI was 51.1, remaining unchanged month-on-month as the sector continued to expand. The overall PMI was 51.0, down 0.7 points but remaining above the expansion area, indicating that the production and business activities of enterprises in China have maintained the momentum of recovery and development, NBS statistician Zhao Qinghe said in a Friday notice.

A reading above 50 indicates expansion and one below indicates contraction.

Amid the country’s economic recovery, there has been significant improvement in investment, consumption and trade, and this momentum is expected to continue, said Li Chang’an, a professor at the Academy of China Open Economy Studies at the University of International Business and Economics. on Friday Global Times.

In 2024, China’s economic development maintained a solid recovery, and key indicators showed an upward trend. The International Monetary Fund on Wednesday raised China’s GDP growth forecast for 2024 to 5 percent, an increase of 0.4 percentage points compared to the World Economic Outlook report released in April, adding to the optimistic signs that China’s economy remains on track for economic recovery.

However, China’s May manufacturing PMI was 49.5, down 0.9 points from the previous month, affected by a relatively high base and lack of effective demand, Zhao said.

The May holidays weighed on manufacturing activity in China, and the readings also reflected relatively weak domestic demand compared to supply, Zhou Maohua, an economist at China Everbright Bank, told the Global Times on Friday.

Despite the decline, domestic manufacturing enterprises maintain stable expectations regarding the market development, as the production and economic activity expectations index amounted to 54.3 in May and since this year – according to the announcement – it has always remained at the level of 54.0 and above.

As the country optimizes and modernizes its manufacturing sector amid the rapid development of emerging industries and new high-quality manufacturing forces, experts expect the manufacturing sector to expand further as more targeted policies come into force.

China is increasing support for the manufacturing sector, especially the advanced manufacturing sector, Li said, adding that greater policy support from the monetary and fiscal sides will help further strengthen the sector’s development.

In 2024, the responsible authorities proposed a series of new policies, including increasing support for scientific and technological innovation in the manufacturing industry, promoting the deep integration of the manufacturing industry with the service sector, and optimizing the environment for the development of the manufacturing sector industry.

The latest move comes after China’s State Council on Wednesday unveiled a detailed action plan to reduce greenhouse gas emissions in 2024 and 2025, with the main goals of reducing the use of fossil fuels, increasing the use of clean energy and modernizing steel and other industries.

Regarding macro policies, Zhou said macro policies will mainly focus on promoting consumption and domestic demand, while supporting the supply side. Zhou said supporting the implementation of targeted policies on large-scale equipment refurbishment and trade in consumer goods will help promote a virtuous cycle of demand and production.