According to the National Bureau of Statistics, the purchasing managers' index (PMI) for manufacturing for the Chinese government, which mostly includes larger corporations and state-owned companies, increased to 50.2 in June, the first time it had done so since February. A value above 50 signifies an increase in activity. The official non-manufacturing PMI, which also covers the construction and services sectors, increased from 47.8 in May to 54.7 in June. It was also the index's highest level since May 2021 and the first time it had expanded again in four months.
The surveys are the most recent indications that China's economy is recovering as it progressively resumes commercial activity after months of widespread Covid lockdowns.
The current increase in China's economic activity was predicted to continue into July by Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, as further mobility restrictions are eased. However, he continued, Xi's devotion to the zero-Covid approach would restrain growth.
"China continues to adhere to its zero Covid policy. This suggests that economic growth would likely remain below potential before the policy is further loosened, in my opinion "said Zhang.
