Chinese employees working on an energy-saving bulb production line at a lighting factory in Suining, southwest China's Sichuan Province. (Photo : Getty Images)
China’s economy shows growth in both the manufacturing and service sector.
According to the report released by Beijing’s official National Bureau of Statistics on Friday, the country’s manufacturing purchasing managers’ index (PMI) for March arrived at 51.8, a little higher than the 51.6 recorded in February. A reading above 50 signals expansion.
The state-run Xinhua News Agency has reported the result “beat market expectations” and was “the highest in nearly five years.”
The Chinese economy is growing strong again, as indicated by the official PMI last month. The expansion started during the last quarter of the previous year and was exceptionally apparent in January and February.
The manufacturing industry leads the growth, which implies state-owned companies now flourish.
The rise in the rates is no mystery. China has employed both monetary and fiscal stimulus in almost unparalleled amounts since 2016.
Once again, Chinese leaders have proved that they can generate gross domestic product by command. But they are doing so to the detriment of China’s “new economy.”
A wide track of unofficial surveys verifies that there was a strong growth in the previous quarter. However, the development was concentrated in state-owned enterprises.
Analysts are astounded that the service sector is expanding at a faster rate than manufacturing as based on official figures. Last month’s NBS’s reading for services spiked to 55.1, the highest in two years. The reading rapidly increased from 54.2 in February.
In a report by Bloomberg, James Laurenceson of University Technology Sydney said “the fact that the real strength is with the non-manufacturing PMI suggests that there’s fundamentally a good story going on."
“It’s increasingly looking like the growth uptick is broadening out beyond the initial impact of the stimulus, in particular into private sector services companies,” said Shane Oliver of AMP Capital Investors.
The expansion of China’s economy is expected to continue with its government providing monetary and fiscal spur.
