China publishes latest Purchasing Managers’ Index
China’s National Bureau of Statistics (NBS) is set to release Purchasing Managers’ Index (PMI) figures for January today.
The NBS, a government agency, releases its PMI index to measure manufacturing sentiment across a broad range of large-scale, state-owned companies in China. A PMI figure above 50 represents an expansion in the manufacturing sector, while a figure below 50 represents a contraction. The PMI has remained above 50 since February 2020, despite the COVID-19 pandemic, and recorded a 38-month high of 52.1 in November 2020. With China’s “internal circulation” policy and increased domestic consumption brought about by slowed exports during COVID-19, January’s figure is expected to be 51.6.
China has led the global economic recovery from COVID-19, and surpassing the 51.6 estimate would solidify Chinese economic leadership for the near future. With state-owned companies only reaching 80% productivity of private Chinese firms, the Chinese economy may be even stronger than the PMI index indicates. Continued Chinese economic success despite COVID-19 may prompt some countries still struggling to recover economically from the pandemic to view the Chinese state-owned company model as an answer to stimulate their domestic economies.
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