A report claimed that China's manufacturing sector showed signs that the Chinese economy is finally stabilizing after months of slowdown. Surveys indicated that Chinese manufacturing companies have started to rebuild their confidence in China's economy after their points showed improvement since November.
According to the Wall Street Journal, one of the manufacturing companies operating in China showed higher purchasing activity since November. Last Monday, the private Caixin manufacturing purchasing managers index was said to have gained momentum and rose to 51.8 from 51.7 from November to October, respectively.
Accordingly, China's manufacturing PMI also rose from 49.3 to 50.2 over the weekend.
The reading was also reported to be above the 50 marks which indicated that it was an expansion in activity rather than contraction, Market Watch reported. Caixin also claimed that new export orders had been increasing for more than a year.
The Caixin PMI, on the other hand, remained small. Other private manufacturers also focused their official index on state-owned firms. Many of the firms operating within the Chinese financial market are also small and private firms.
According to the report, the official PMI has a larger sample base. The survey also covered 3,000 manufacturers in total while Caixin itself runs 500 companies. Moreover, the respondents also shared that overall demand is also recovering along with the employment sub-index.
Economist at CEBM Group Zhengsheng Zhong said that the activity may have shown improved confidence towards the Chinese economy, but such remains subdued. He revealed that the company still worries about the market conditions and current policies that have remained persistent in recent years. He also said that stocks remain limited and that companies remain reluctant in increasing or refilling their stocks further.
Last Sunday, China Central Bank Governor Yi Gang also said that due to investor reluctance, the country would not impose competitive strategies. The measure was said to ease the major economies that are approaching zero interest rates.
Furthermore, the Yi also wrote an article and claimed that China's economic growth is not worrisome. He manifested that the growth rate remains reasonable and that inflation is also relatively minded.
According to CNBC News, despite the improvement, the manufacturing sector in London fell while manufacturing data from China also failed to ease the doubts on its economic slowdown. In turn, the two factors caused the decline of the traded copper contract between the London Metal Exchange and Shanghai Futures Exchange. The yuan gave up 0.3 percent to 47,1000 a tonne.
