China Manufacturing and Services PMI Decline in April
China's manufacturing and services sectors exhibited slower expansion in April, indicating a moderation in economic activity. The manufacturing purchasing managers' index (PMI) as reported by the National Bureau of Statistics (NBS) decreased slightly to 50.4 from 50.8 in March, yet remained above the 50-point threshold that denotes growth. This figure surpassed expectations set by a Reuters poll, which had predicted a median forecast of 50.3.
Despite the overall expansion, the services sector experienced its slowest growth since January, with the NBS non-manufacturing survey's services sub-index dropping to 50.2 from 52.4 in March. Meanwhile, new export orders and employment figures continued to rise at a diminished rate.
The NBS has acknowledged the growth of new economic drivers within the manufacturing sector, specifically in equipment manufacturing and high-tech manufacturing, which have recorded PMI readings of 51.3 and 53, respectively. This indicates a sustained recovery in these areas despite the broader slowdown. The IMF has advised China to emphasize support for domestic demand to stimulate economic activity, while analysts have noted challenges such as the ongoing property market downturn and high local government debt. Amid these concerns, China has set an ambitious annual growth target of five percent for 2024 and plans to employ policy tools such as adjusting banks' reserve requirement ratio (RRR) and interest rates to bolster the economy.
