The economy Growth in China's manufacturing sector

China's economy has been searching for stability for months. According to the state purchasing managers' index, the mood in industry is gloomy. An independent survey comes to a different conclusion.

According to an independent survey by "Caixin", China's industry has picked up again in August. The purchasing managers' index (PMI) of the economic medium for the manufacturing industry came in at 50.4 points, 0.6 points higher than in July. In that month, the indicator had fallen to a nine-month low. A value above 50 signals an expansion in production.

According to official data, the manufacturing industry accounted for more than a quarter of China's economic output in the first half of this year. The PMI is an important leading indicator for analysts.

The "Caixin" index contrasts with the official index from the Chinese statistical office, which signaled a rather gloomy mood in the sector at the weekend with a value of 49.1 points. The fact that the two indices signal different trends for the same sector is also due to the fact that the statistics office tends to survey purchasing managers of large and state-owned companies for its index. The Caixin PMI, on the other hand, also includes smaller private companies or those that are more export-oriented.

A stable expansion of supply and demand had contributed to the improvement in the manufacturing sector, said economist Wang Zhe from the Caixin Insight Group. However, the analyst gave reason for caution, as although China's economy stabilized in the second quarter, performance was below market expectations.

The world's second-largest economy is suffering from weak domestic demand. According to Wang, demand abroad also harbors uncertainties for the export-oriented economy. Disputes with important trading partners such as the EU and the USA, as well as a real estate crisis in China, are likely to cause concern for the government in Beijing, which had set a growth target of around five percent for this year.