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HomeBusinessChina's economy stabilizes as factory activity returns to expansion.

China’s economy stabilizes as factory activity returns to expansion.


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China’s manufacturing sector saw growth in September for the first time in six months, according to an official survey. The purchasing managers’ index (PMI) for the sector rose to 50.2 from 49.7 in August, surpassing expectations. The non-manufacturing PMI, which includes the service sector and construction, also increased to 51.7 from 51.0 in August. The composite PMI, which combines both manufacturing and non-manufacturing activity, climbed to 52.0 in September from 51.3 the previous month. These positive indicators suggest that China’s economy is stabilizing, following a downturn earlier in the year.

The manufacturing PMI, along with strong industrial profit figures, indicates that China’s economy is gradually recovering. These data points suggest that the country’s economy is beginning to bottom out after a period of sluggish growth. Analysts believe that the improvement is partially driven by the loosening of policies in the property sector. However, challenges remain, particularly in the property market. New home prices and property investment have both declined, and the debt crisis in the sector is causing global market concerns. More policy support may be needed to ensure China’s economy can reach the government’s growth target of approximately 5% for this year.

Despite the positive economic indicators, there are still uncertainties and risks in China’s economic recovery. The investigation into the founder of China Evergrande Group, the world’s most indebted property developer, has raised concerns about the stability of the property market. The Asian Development Bank has downgraded its economic growth forecast for China due to the weakness in the property sector. Analysts believe that fiscal policy support will be crucial in maintaining the momentum of China’s economic recovery, but anticipate that any significant changes may occur next year rather than this year. Overall, China’s economy is showing signs of stabilization, but challenges in the property sector remain a key concern for policymakers.

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