comments and feedback

Steady Movement of Economy Became Further Clear (Reading•Discovering the Track of Economic Operation)

—— The PMI of manufacturing industry has maintained above the threshold line for 10 consecutive months

Submit Time:26-06-2017 | Zoom In | Zoom Out

Author:Du Haitao | Source:People’s Daily


  China Federation of Logistics & Purchasing and Service Industry Research Center of National Bureau of Statistics published on May 31 that the Purchasing Managers’ Indexes (PMI) of the manufacturing industry of China in May was 51.2%, at the same level of the previous month. The main sub-indices showed that the finished products inventory index, purchase price and ex-works price index dropped significantly, by more than 1 percentage point, and other indices showed no big change. The PMI indicates that at present, the economic operation remains stable with a good momentum for growth.

  The economic growth has changed from short time rising to overall stability

  The 13 sub-indices show that, compared with the previous month, the export orders index, backlog orders index, raw material inventory index, employment level index and production activity expectation index rose by a small LAYOUT-GRID-MODE: char">  

  Zhang Liqun, research fellow of the Development Research Center of the State Council said that, following the fall back in April, the PMI in May maintained at the same level of previous month, and it has remained above the threshold line for 10 consecutive months, indicating more clearly the trend of steady economic growth. The economic growth has changed from short time rising-falling status to an overall stable trend.

  The general market supply and demand relationship is good. The supply and demand growth has been basically stable, and fairly balanced. In May, the production index was 53.4%, a slight fallback of 0.4 percentage points from that of April, and maintaining over 53% for 8 consecutive months. The new order index was 52.3%, at the same level of April, maintaining over 52% for 8 consecutive months. At present, the gap between the production and new order has narrowed to about 1 percentage point, in a fairly rational state, a favorable situation for the market to clear up overstock, improve supply quality, promote the rational flow of resource elements and optimize allocation.

  The production and operation situation of enterprises is good. The PMI of large enterprises was kept at a relatively higher level, staying above 51% since June 2016, with slight fallback in the recent two months. The PMI of medium sized enterprises has kept over 50% in 2017, and increases obviously in May, reaching 51.3%, 1.1 percentage points higher than April. The PMI of small enterprises has increased for 3 months running, reaching 50% in April and 51% in May, the highest value in the recent 5 years.

  “The overall production and operation situation of enterprises has been good, benefiting on one hand from the sustained stable and improving macroscopic economic environment, and on the other hand from favorable policies”, according to Chen Zhongtao, an analyst of China Logistics Information Center, the government has made increasing efforts to cut taxes on enterprise, the taxes on enterprises were cut by over 570 billion yuan in 2016, and will be further cut by about 350 billion yuan in 2017. A series of tax reduction measures were launched at the executive meeting of the State Council called on April 19, with a detailed timetable set, to continually cut cost and build up the after-force in the real economy. These policies and measures have really given benefits to enterprises, and invigorated the market.

  The fundamentals of industries are good. The movement of PMI of industries showed that in May, the PMI of the 14 of 21 main industrial sectors with PMI investigated rose from the level of April. The PMI rose the most significantly in the consumer goods industries, by 1.6 percentage points as a whole, reaching 53.8%. The PMI of the equipment manufacturing industry, high-tech industries and consumer products industries maintained at a high level of over 52%, playing a fairly outstanding support role to the overall stability of the manufacturing industry.

  The leading role of consumer-driven environment is further enhanced

  In May, the business activity index of non-manufacturing industry of China was 54.5%, up by 0.5 percentage points over the previous month. The expectation index of new orders, new export orders and business activities increased over the previous month, by a magnitude between 0.4~1.4 percentage points; and other main indices decreased, by a magnitude between 0.1~1.4 percentage points.

  Cai Jin, Vice President of China Federation of Logistics & Purchasing, believed that the fact that the business activity index of non-manufacturing industries of China had remained over 54% in 8 consecutive months up to May which indicated an accelerating growth rate of the operation activities of the non-manufacturing industry, indicating further enhancement of the motive force for optimization and upgrading of the economic structure. Especially, the substantial increase of the business activity index in the retail sector increased substantially, the continued trend of rapid development of post and delivery activities associated with online consumption, and the continuous rise of indices in tourism-related sectors such as accommodation and scenic spot services reflected active consumption by the mass public, and continuing enhancing leading role of consumption drive.

  Firstly, the business activity index of retail sector and new order index reflecting the consumption by residents increased substantially over the previous month, and the average level of January to May showed obvious improvement from that in the same period of the previous year; secondly, post and delivery activities associated with online consumption continued its trend of rapid development, with both business activity index and new order index both exceeding 60%; thirdly, sectors related to tourism consumption such as accommodation and scenic spot services have kept on active, with the index rising in two consecutive months over the previous month.

  “In general, with a series of policies and measures gradually showing effect, such as stabilizing the economic situation, pushing ahead the supply-side structural reform, stimulating the market vigor and enhancing the motive force of economic growth, the economic operation has been stable with a momentum of improving since the second half of last year.” Chen Zhongtao said, “At present, we should pay attention to maintaining stable the movement of prices on one hand, to avoid too rapid drop of prices, which will suppress the initiatives of enterprises in production and operation activities; on the other hand, we should maintain stable the market demand and the production and operation activities of big enterprises, and continue to push forward the readjustment of economic structure and its transition and upgrading.”

Related Articles