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December 2, 2020

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Caixin: Factory activity fastest in a decade

ACTIVITY in China’s factory sector accelerated at the fastest pace in a decade in November, a business survey showed, the latest sign that the world’s number two economy is well on track to recovery from the coronavirus.

The Caixin/Markit Manufacturing Purchasing Managers’ Index rose to 54.9 from October’s 53.6, with the gauge staying well above the 50-level that separates growth from contraction for the seventh consecutive month. The Caixin PMI reading was the highest since November 2010, and comes after an official gauge of factory activity, focusing more on larger and state-owned firms, rose at the fastest pace in over three years.

E-commerce shopping promotions in November showed strong consumer demand, bolstering confidence for small and medium-sized firms. Economic indicators ranging from trade to producer prices all suggest a further pick up in the industrial sector.

“Manufacturing continued to recover and the economy increasingly returned to normality as fallout from the domestic COVID-19 epidemic faded,” Wang Zhe, senior economist at Caixin Insight Group, wrote in a note accompanying the survey release.

Gauges of both total new orders and factory output marked 10-year highs. New export orders rose more modestly. The private sector survey also showed Chinese factories hired workers for the third month in a row and at a faster pace.

“Supply and demand improved at the same time. Employment recovered markedly and overseas demand kept expanding,” said Wang.

Input and output prices both rose, with respondents to the survey citing a sharp rise in the cost of raw materials, especially metals, he said.

The official November PMI came in at 52.1, data showed on Monday, beating the 51.4 seen the month before and back at levels last seen in September 2017.


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