Manufacturing industry growth shows Chinese economy stabilizing

2017-01-10
english.gov.cn/chinadaily.com.cn

China’s manufacturing industry witnessed a further recovery in the last month of 2016, indicating a stable development of the world’s second-largest economy.

The Caixin/Markit China Manufacturing Purchasing Manager’s Index (PMI), an indicator of manufacturing activity, rose from 50.9 in November to 51.9 in December of 2016, the biggest increase in six years.

The index had been growing since last June, showing that China’s manufacturing industry continues to recover at an unexpected pace.

The development of the Chinese economy releases signals of stabilization in sectors such as real estate, credit and loan, and government stimulation, according to Zhou Jie, a senior economist at Commerzbank.

It is estimated that the momentum will continue through the second quarter of 2017. But a fast rise with inflation expectation could possibly lead to the tightening of monetary policy.

In addition, a stronger US dollar will put emerging markets under the pressure of capital outflow.

In the next few years, the Chinese government should make efforts to control capital outflow to foreign industries of real estate, football, and entertainment, and focus overseas investment on strategic industries, said Zhou.