Several banknotes worth 100 Chinese Yuan are placed on the table.
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China’s factory activity expanded for the third consecutive month in January, a private sector survey showed on Thursday, boosted by an expansion in new export orders for the first time in seven months.
But Thursday’s print publication widened the gap with official data, pointing to patchy growth in the world’s second-largest economy and underscoring the need for policy support.
The Caixin/S&P Global Manufacturing Purchasing Managers’ Business Conditions Index was 50.8 in January and 50.8 in December, according to Thursday’s release. Economists polled by Reuters had expected the figure to reach 50.6. The 50 point mark separates expansion from contraction.
The country’s official manufacturing PMI stood at 49.2 in January, the fourth straight month of decline, compared to 49 in December, according to data released by China’s National Bureau of Statistics on Wednesday.
Senior Wang Zhe said, “New export orders expanded for the first time in seven months, and overseas demand recovered slightly.According to the reports of surveyed companies, the largest production increase was in investment goods, and the improvement in external demand was mainly due to intermediate goods. “I was seen in it,” he said. Caixin Insight Group economists said in a release on Thursday.
This discrepancy is primarily due to differences in the study samples. The Caixin Manufacturing PMI tracks around 650 private and state-owned manufacturing companies that are export-oriented and based in China’s coastal regions, while the official PMI tracks 3,200 companies across China.
Still, both studies identified some similar trends.
The official survey released on Wednesday also showed that employment in China’s manufacturing industry was on the decline, similar to the Caixin survey.
“Employment continued to decline. Cost reduction and efficiency improvement were companies’ top concerns, and the upturn in market activity did not fully translate into new jobs,” Wang said.
“January’s labor market contracted for the 10th time in the past 11 months, but not as much as in the previous month.Despite continued layoffs, companies were able to reduce their backlog of jobs and “There was a gradual decline,” Wang added.
China has also been teetering on the brink of deflation for the past nine months, and producer prices have been falling for at least a year.
“The price level remained weak. The increase in input costs was limited due to a slight increase in raw material prices. The input cost index was at its lowest level since August,” Wang said.
“Increased market competition limited the bargaining power of enterprises, and the index returned to the contraction area, causing production prices to fall further,” Wang added.