BEIJING – Chinese factory activity grew at the fastest pace in more than three years in November, keeping it on track to be the first major economy to fully recover from the coronavirus crisis.
The official purchasing manager index in the manufacturing sector (PMI) rose to 52.1 in November from 51.4 in October, according to data from the National Bureau of Statistics on Monday. It was the highest PMI reading since September 2017 and remained above the 50 point mark that separates growth from contraction on a monthly basis.
Analysts expected it to climb slightly to 51.5.
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China’s vast industrial sector is steadily returning to pre-pandemic activity levels, and stringent containment measures crippled huge swathes of the economy earlier this year.
But soaring infections and further lockdowns among many of its major trading partners could reduce demand for Chinese exports, which have so far been surprisingly resilient.
The official PMI, which largely focuses on large corporations and state-owned enterprises, showed the new export orders sub-index stood at 51.5 in November, improving further from 51, 0 a month earlier.
Economic indicators ranging from trade to producer prices all point to a further recovery in the industrial sector.
A sub-index of small business activity stood at 50.1 in November, up from 49.4 in October.
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An online shopping festival in November in China sparked strong consumer demand, boosting confidence among small and medium-sized businesses.
Nomura analysts predict economic growth will rise to 5.7% in the fourth quarter on a year-over-year basis, from 4.9% in the third quarter.
It is expected to grow by around 2% for the full year – the lowest in more than three decades, but still much stronger than other major economies that are still struggling to get their coronavirus outbreaks under control.
In particular, China has seen a strong recovery in vehicle sales, fueled by growing demand for trucks and electric vehicles.
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In the service sector, activity increased for the ninth consecutive month and at the fastest pace since June 2012, as consumer confidence improves further amid a few COVID infections. Rail and air transport, telecommunications and satellite services and the financial sector were among the best performing sectors in November.
A sub-index of construction activity stood at 60.5 in November, up from 59.8 in October.