Chinese manufacturing activity surged in December 2017, according to an independent indicator released Tuesday by the media group Caixin. This contradicts the government figure showing a slight slowdown in manufacturing growth.
The Purchasing Managers’ Index (PMI), calculated independently by IHS Markit and published by Caixin, stood at 51.5 last month versus 50.8 in November. This metric, based on the order books of the companies surveyed, is seen as a harbinger of the future economic situation of the world’s second-largest economy. A figure above 50 indicates an expansion of activity, while below 50 indicates a contraction.
The Caixin index, which focuses on small and medium-sized enterprises, reflects the strength of exporting firms, thanks to strong global demand. China actually saw its exports rebound dramatically in November.
“Manufacturing activity improved in December, supporting the idea that economic growth has stabilized in 2017,” said Zhong Zhengsheng, an economist at Caixin Group’s CEBM firm.
“But we must not underestimate the pressures that are likely to impact (the industry) in 2018, due to a tightening of monetary policy and stricter supervision of public finances”, and the end of the government’s stimulus measures, he warned.
In fact, the official PMI index released Thursday by the National Bureau of Statistics (SNB), a government agency, drew a darker picture, reporting, on the contrary, a slowdown in activity at the end of 2017.
This official figure, which focuses more on large corporations and state-owned firms, stood at 51.6, against 51.8 in November, suggesting that the sector continues to grow at a steady pace, despite an extensive campaign against pollution and excess capacity closures.
Beijing has reduced the activity of its heavy industries in the north-east of the country in order to limit overcapacity and combat the pollution smog that traditionally envelops the region during the winter, which could, in the opinion of the experts, have tripped the economy of the Asian giant in the fourth quarter of 2017.
China saw in 2016 its weakest growth in 26 years (+ 6.7%), before a rebound (+ 6.9%) in the first half of 2017 and an increase of 6.8% in the third quarter. This occurred against a backdrop of soaring credit and investments in infrastructure.