China's manufacturing activity in September has surged, an official survey showed, adding to a run of indicators that the world's second-largest economy has begun to bottom out.
According to the National Bureau of Statistics, the purchasing manager index rose to 50.2 in September from 49.7 in September, edging above the 50-point limit demarcating contraction in activity from expansion. The PMI, which is the first official statistics for September, shows signs of stabilization in the economy, which had sagged after an initial burst of momentum early in the year when China's extremely-restrictive COVID-19 policies were lifted.
Preliminary signs of improvement have emerged in August, with factory output and retail sales growth accelerating, while declines of exports and imports narrowed and deflationary pressures eased. In August, profits at industrial firms posted a surprise 17.2 percent rise, reversing July's 6.7 percent decline.
The non-manufacturing PMI, which includes sub-indices for service sector activity and construction, also rose, coming in at 51.7 compared to August's 51.0.
The Composite PMI rose to 52.0 from 51.3 in September, a rise of 51.3 from 51.3 in September.
Near-term data on the radar of economists include consumer spending for the longest holiday this year. The Mid-Autumn Festival, which will culminate in the National Day break through Oct. 6, is scheduled to kick off on Friday.
Passenger travel by rail reached 20 million trips on Friday, a single-day record, state media reported on Saturday, in a bullish start to what authorities had predicted to be the most popular Golden Week in history.
Policymakers are welcoming more stable economic indicators as they continue to grapple with a property sector debt crisis that has shaken global markets. The government has announced measures to shore up the property market, including lowering mortgage rates, but the sector is far from being out of the woods.
The rate of property investment dropped for an 18th consecutive month, the fastest in 10 months in August.
China's most indebted property developer, China Evergrande Group, said its founder was being investigated overalleged 'illegal crimes'.
The Asian Development Bank cut its 2023 economic growth outlook for China to 4.9 percent from a forecast of 5 percent in July.
Analysts say more policy support is required to ensure China's economy can reach the government's growth target of about 5 percent this year.
The economy stabilized partly because of the loosening of property sector policies, says Zhiwei Zhang, chief economist of Pinpoint Asset Management.