Beijing’s services sector has recorded impressive growth, while its manufacturing sector has just marginally improved its standing. With its property market heating up, its official Purchasing Manager’s Index is also gathering steam. 2017 could be a promising year for China if it plays its cards right.
Chinese manufacturing activity unexpectedly grew in November, expanding at its most rapid pace in over two years. In what could be a promising sign, the world’s second largest economy is picking up momentum in what could be a promising 2017.
In November, China’s Purchasing Managers’ Index (PMI) stood at 51.7. In the previous month the official PMI stood at 51.2. The 50-point mark separates growth from contraction on a monthly basis.
The rise in the prices of commodities have resulted in increased profitability for companies selling building materials such as cement and steel. However, future prices have cast a negative outlook this week, as they have plunged, since big commodity exchanges have taken steps to tame the month-long bull rally.
Fuelled by strong government spending, the Chinese economy grew at a steady pace of 6.7% during the third quarter. It is in line to meet Beijing’s full-year target of 6.5% to 7.0%. Record bank lending and the surging property market has added to the enormous debt pile of the country.
Export orders hit their 12 month high of 50.3, although they barely expanded into new territory. If this PMI gains traction it will be a welcome sign for Beijing’s massive manufacturing setup.
With China reeling under excess capacity, the employment sub-index stood at 49.2. More jobs were lost this month. In October, the index stood at 48.8.
In what is a welcome sign, China services sector showed rapid growth in comparison to the previous month. The official non-manufacturing PMI stood at 54.7 in November, its strongest reading since June 2014.
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