'Light at the end of the tunnel': China's factory activity jumps in March amid global recession fears
- China's manufacturing activity expanded in March 2020, showing signs of economic recovery post the coronavirus-fuelled chaos.
- On Tuesday, China said its purchasing managers' index (PMI) for March was 52.0, a 16.3% increase from a record low of 35.7 in February.
- The PMI is a gauge to indicate the economic direction of services trends in the economy. A reading of 50 indicates a neutral or stabilised level of growth, above 50 exhibits expansion and below 50 would mean stagnation.
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Manufacturing activity in China jumped in March, showing that the country's economy is slowly recovering.
China, on Tuesday, reported that its official purchasing managers' index (PMI) for March came in at 52.0 - a big jump from 35.7 in February. A reading above 50 indicates expansion, while a figure below 50 suggests contraction.
China's statistics report is among the first economic data releases that reflect a recovery of the economic toll in China.
The report, however, states that these numbers don't mean that China's economic operations have returned to "normal levels".
China's National Bureau of Statistics said in its PMI announcement that in March, "the situation of epidemic prevention and control in China continued to improve, the order of production and living was steadily restored, and the resumption of production and production of enterprises accelerated significantly".
In March, China's central bank launched a number of measures, including a $79 billion (R1.4 trillion) stimulus package to help the economy fight the impact of coronavirus.
The pandemic, called COVID-19, has caused anxiety and panic across global financial markets with trillions of dollars wiped out of stocks. But the new statistics signal a sign of hope for other economies.
"China provided Western investors with a light at the end of the tunnel on Tuesday showing it is possible to return to growth after the worst (hopefully) of the coronavirus crisis," said Connor Campbell, a financial analyst at Spreadex said in a morning note.
Meanwhile, another analyst said this will help soothe investor confidence.
"Every little step forward for the markets will help to repair investor confidence following the catastrophic start to the year for equities," said Russ Mould, investment director at AJ Bell wrote in a morning note.
A private PMI survey conducted by Caixin and IHS Markit is expected to be released on Wednesday, according to CNBC.
Earlier this month, UK's composite PMI fell from 53 to a record low of 37.1 in March while in the United States, the index plummeted from 49.6 to to 40.5 in the same period.
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