Factory Production and Orders Rebound in China

Seven killed in blast at electronics factory in east China

China’s efforts to boost its trade war-damaged economy appear to be working.

Factory activity in China jumped in March, according to the official purchasing managers index released Sunday. The index rose to 50.4 in March, up from February’s 49.2 and the highest reading in six months.

The numbers suggest that the Chinese government’s efforts to support the economy are having a positive impact. They also suggest that the U.S. tariffs on Chinese goods are not as much as a drag as they appeared to be. The U.S. agreed to hold off on raising tariffs in December, originally for 90-days but since extended indefinitely.

The Chinese economy often slows during the lunar New Year and picks back up in the aftermath. But Sunday’s PMI reading rose above expectations.

It is still too early to say the Chinese economy is back on track. The second half of last year saw a dramatic slowdown in growth, as domestic efforts to curb risky financial activity and the trade dispute with the U.S. took their tolls. By most accounts, January and February were dismal months.

The March PMI showed improvement in both production and new orders. The exports portion of the index rose to 47.1 from 45.2. Any measure below 50 indicates a contraction.



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