Credence Independent Advisors: China’s manufacturing growth witnesses a boost
China’s manufacturing output grew at its fastest pace in more than two years in July, pointing that China’s economy may be stabilizing.
The figures for July were promising. According to the National Bureau of Statistics; the official Purchasing Managers Index (PMI), which measures activity in bigger factories and is a key to measure sector’s health rose to 51.7 in July from 51 in June. The rise in figures meant an increase in the expansion.
The improvement and growth in the manufacturing sector is a direct result of a series of steps taken by China in the recent months to help boost its economic growth.
The HSBC PMI survey, which measures manufacturing activity in relatively smaller factories, gave a preliminary reading of 52 for July, which was an 18 month high.
China’s growth stabilizing:
China, which is also the world’s second largest economy, has recently witnessed a series of positive economic data along with the rise in PMI.
In June, China’s economy witnessed a 7.5% rise in the April to June quarter, from a year ago.
Other data also points to the positive developments taking place, with factory output, fixed asset investment and retail sales showing an increase in the recent weeks.
The positive outlook of China’s economy has encouraged policymakers to take steps to help further boost China’s growth.
Planning to cut taxes on smaller companies and speeding up the construction of railway lines across China are part of a series of steps taken by policymakers.
Other steps include China’s central bank making more cash available for banks engaged in lending to agriculture related businesses and smaller companies.
Furthermore, the central bank has also said that it will encourage banks to lend more to exporters in order to boost shipments.
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