Manufacturing activity of China picked speed during August, hitting the sixteen-month high and allaying some of the fears of sharp slowdown within its economy.
Official Purchasing Managers’ Index (PMI) did rise from 50.3 to 51 during July.PMI is key gauge when it comes to the health of sector and reading above fifty shows an expansion.
World’s 2nd-largest economy, China, has taken many steps for boosting its economy following the slowdown of growth rate for 2 quarters continuously.
“We are seeing clearer signs of economic conditions improving,”
said China at JP Morgan in Hong Kong chief.
Economist of China in Hong Kong, Haibin Zhu, said that they were looking at visible signs of improving economic conditions.Economy of China expanded by about 7.5% during April till June quarter compared to one year earlier – that’s down from 7.7% growth rate during the previous 3 months.
There’ve been concerns regarding the growth rate that it might slow further during following months and not least due to one slowdown that’s in demand as for the Chinese exports that are from the key markets like Europe and the US.
This has hurt export and manufacturing sectors of China, which are the key drivers when it comes to growth of its economy.Prompted by slowdown in the demand externally, Beijing has tried boosting domestic consumption as an attempt on rebalancing the economy as well as sustain high growth levels.
Last month government suspended VAT and the turnover tax when it came to small businesses having monthly sales that were less than twenty thousand yuan.
This decision is speculated to benefit over 6 million companies which are small and also boost employment.Also Beijing said it would implement measures for simplifying the procedures for customs clearance, cut the operational fees as well as facilitate exports of medium-sized and small private enterprises.
According to Mr Haibin, this recent shift within policy stance along with much concrete announcement of policy was one major reason behind recovery in this sector.