China posts factory activity growth for the first time in four months

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China posts factory activity growth for the first time in four months

After contracting factory activity for four months in a row, surprisingly, China had posted a growth in its factory activity on march, as an official survey data revealed on Sunday, the 31st of March 2019, pointing out that the economic stimulus such as low-cost long-term taxes, injected during the first quarter of 2019 might have been started to take hold in the world’s second largest economy.

According to multiple analysts, if China could sustain the momentum and improve its business condition, its manufacturing would have been on a path of recovery, which might eventually ease a growing fear that the Chinese economy could be slipped into a much sharper economic downturn.

Never the less, investors alongside analysts remained cautiously optimistic, saying that the consumer demand and heavier investments still remained at the bay, which might add potential pressure to the manufacturing sectors.

According to Sunday’s (March 31st) data released by the National Bureau of Statistic, the Official Purchasing Managers’ index (PMI) had been surprisingly lifted to 50.5 in March from February’s three-year low figure of 49.2, remarking Chinese economy’s first expansion in four months, while 50.0 level has been considered to be a technical level to identify a recessed economy.

Citing that the boost would more likely to proffer a big boost to the stock market on Monday (April 1st) morning opening, a chief China economist at Nomura, Ting Lu said, “The jump will likely give a big boost to stock markets and could delay a cut in the reserve requirement ratio (RRR)”.