Manufacturing activity in China grows, restores hope for the jobless

Looks like the push by the government is finally showing results in China. For the first time this year, the manufacturing sector in the country has suddenly shown improvement. With increasing labour costs and poor sales, many foreign companies, including car and electronic manufacturers had closed their plants in the country not long ago. The unemployment rate had risen to 5.3 per cent in February, the highest in two years. The employment sub-index had gone up only marginally to 47.6 from 47.5 in February.

While Samsung Electronics has already shut down one mobile phone manufacturing plant in the country in 2018, Sony Corp is also expected to shut down its smartphone manufacturing plant in Beijing by end of April.

But now things seem to be looking up.

If this momentum is continued, the Chinese manufacturing sector will soon recover from the major slump that it had fallen into. It is reported that the official purchasing managers’ index (PMI) went up to 50.5 in March, which is a very encouraging jump from 49.2 in February, which was the lowest in three years.

While new orders were seen to be growing at an overwhelming pace, export orders were not going up since last year, which indicated that outside demand wasn’t strong enough. Government policy will have to do its bit to help push the economy.

Policymakers have admitted that there has been increasing pressure for the economy. It has been almost nine months since the trade between the US and China has been disrupted, obstructing the flow of goods worth billions of dollars. And it is unlikely that any terms favourable to both countries will ever be worked out.

Discussions between the leaders of the two countries are expected to take place this week.