Private Survey Shows China Manufacturing Sector Strengthening

USA flag and China flag print screen on chess with white background.It is symbol of tariff trade war tax barrier between United States of America and China.-Image.
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A private survey showed that conditions in China’s manufacturing sector continued to improve in November.

Caixin/Markit manufacturing Purchasing Managers’ Index (PMI) rose to 51.8, up a tick from 51.7 a month earlier. It was expected to decline to 51.4. All readings above 50 signal expansion.

“China’s manufacturing sector continued to recover in November, with both domestic and overseas demand rising and the employment subindex returning to expansionary territory for the second time this year,” said Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group.

The survey showed new business rose strongly in the month, which underpinned a further solid increase in production. Notably, new export orders saw the first back-to-back monthly rise for over a year-and-a-half.  Staffing levels were broadly stable following a seven-month sequence of decline.

“If trade negotiations between China and the U.S. can progress in the next phase and business confidence can be repaired effectively, manufacturing production and investment is likely to see a solid improvement,” Zhengsheng said.

The rebound in the manufacturing sector, however, could make a trade deal harder to reach. Chinese officials may be willing to endure tariffs for longer and perhaps risk even higher tariffs if the strains the duties place on China’s economy appear to be waning. The U.S. presidential election is less than 12 months away and some Chinese officials would prefer to await its outcome than commit to even minor reforms now.

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