20231003-招银国际-PMI_returns_to_expansion_as_sign_of_economic_recovery_5页_748kb

China Economic Report Summary

Key Points

• Manufacturing PMI: September PMI rose to 50.2%, beating expectations after five consecutive months of contraction. Production, new orders, and purchase volumes continued to expand, indicating domestic demand improvement. Large enterprises showed strong recovery; SMEs remained in contraction. Export orders slightly improved, but imports continued to decline. Energy and commodity price increases fueled a reflation trend.

• Service Sector: Services PMI rebounded to 50.9%, but weaker travel demand affected output. Employment index deteriorated, highlighting underemployment and a drag on consumption. Construction PMI improved, and business sentiment strengthened in some areas.

• Policy Impact: Recent policy loosening included eased property restrictions, credit supply increases, and local government debt resolving plans, expected to support economic recovery in the coming quarters.

• GDP Forecast: Maintain forecast at 5.1% for 2023 and 4.8% for 2024, with gradual improvement anticipated as China's economy recovers amid policy support.