The Caixin manufacturing PMI, released on Monday, beat expectations and was in line with official calculations, indicating a marked recovery in China's manufacturing sector thanks to supportive government policies and easing of China-US trade spat, economists told the Global Times on Monday.
The Caixin China general services purchasing managers' index (PMI), a gauge of factory activity, stood at 50.8 in March, the highest reading in 8 months.
It was the first time in the past four months the reading rose above 50, the mark that separates industrial expansion from contraction, and the first time since July 2018 the PMI reached 50.8.
The official PMI, which was released Sunday, rose to 50.5 in March from 49.2 in February, according to data from the National Bureau of Statistics.
Both official and private survey results rebounded above 50, indicating that factory activity in large, medium and small enterprises recovered in March after implementation of stabilizing growth policies, Tian Yun, vice president of the Beijing Economic Operation Association, told the Global Times on Monday.
"Tax reduction has relieved our stress a lot," a manager of a shoe factory located in East China's Fujian Province, told the Global Times.
"Although our orders and sales in the first quarter have slightly improved, we remain vigilant for the next quarter as it takes time for those policies to take effect," he said.
The expectation of easing tensions in the China-US trade war also helped strengthen confidence, Tian added.
The index for new export orders rebounded back into expansion zone after a fall in February, driven by stable external demand in the first quarter, according to the Caixin PMI survey.
Central and local governments have been increasing investments since the beginning of 2019, and a large number of projects have kicked off, Liu Xuezhi, an economist at Bank of Communications, told the Global Times on Monday.
"New policies in cutting taxes and fees will further ease the burden of companies, and manufacturing PMI could be expected to remain in the expansion zone in the second quarter," Liu said.
Major infrastructure projects launched in the first quarter also helped company sales, an employee of Chinese machinery producer Sany Heavy Industry Co, who preferred not to be identified, told the Global Times on Monday.
The employment index entered the expansion zone for the first time since November 2013, indicating great improvement in employment in the sector, according to Caixin.
