BEIJING : China’s manufacturing activity expanded as the fastest pace in more than a decade in February, an official index showed on Wednesday, smashing expectations as production zoomed after the lifting of COVID-19 restrictions late last year.
The manufacturing purchasing managers’ index (PMI) shot up to 52.6 from 50.1 in January, according to the National Bureau of Statistics, above the 50-point mark that separates expansion and contraction in activity.
The PMI far exceeded an analyst forecast of 50.5 and was the highest reading since April 2012.
The world’s second-largest economy recorded one of its worst years in nearly half a century in 2022 due to strict COVID lockdowns and subsequent widespread infections. The curbs were abruptly lifted in December as the highly transmissible Omicron spread across the country.
Global markets cheered the big surprise in the PMI with Asian stocks and the Australian dollar reversing earlier losses, the offshore yuan perking up and oil rallying, as investors took a more optimistic view on China’s economic prospects.
“While we need to treat these numbers will caution as there might be significant seasonal and event factors, the overall trend still points to a solid recovery at the beginning of 2023,” said Zhou Hao, economist at Guotai Junan International.
Markets expect the annual meeting of parliament, which kicks off this weekend, will set economic targets and elect new top economic officials.
“The decent PMI readings provide a positive note for the upcoming National People’s Congress. We expect the government to roll out further supportive policies to cement the economic recovery,” said Zhou.
Source: Reuters
