China's PMI Bounces Back as the Country Shows Signs of Recovery from Coronavirus Epidemic

CIOReviewIndia Team | Tuesday, 31 March 2020, 10:38 IST

Chinas PMI Bounces Back as the Country Shows Signs of Recovery from Coronavirus Epidemic

Recovering from the record-low in February due to the coronavirus lockdown in the country, China’s PMI hasbounced in the month of March. China has said that its official Purchasing Manager’s Indexfor March was 52.0, a massive rise from 35.7 last month, beating all the expectations.  Manufacturing activity in China’s witnessed dramatic slowdown earlier due to large-scale country wide lockdowns following the coronavirus outbreak. China’s non-manufacturing PMI, a gauge related to services and construction sectors for March is 52.3, an up from 29.6 in February.

“We view the jump in both the manufacturing and non-manufacturing PMIs in March as a one-off gain from the very low comparison base in February.The seemingly strong readings in the March PMIs do not mean Beijing will be complacent. By contrast, we think Beijing is quite aware of the dire situation and will step up financial relief and stimulus in coming weeks,” the Nomura economists said in a note following the release of China’s PMI readings.

“As of March 25, the resumption rate of large and medium-sized enterprises was 96.6 per cent, an increase of 17.7 per cent from the survey results on February 25. We cannot say China's economy has fully returned to normal levels based on a single month. We need to continue observing changes in the following months,” said an NBS spokesperson attributing the positive PMI to the successful efforts of Chinesegovernment to reopen large parts of the economy.

Chinais probably the the first major economy to recover from the impact of coronavirus outbreak. However, the epidemic is showing adverse impact on the economies of many countries across the globe including the USA, the UK, Italy, Spain, etc. despite effort to contain the virus. China’s recovery is being watched closely by policymakers around the globe to device strategies so as to bounce back as early as possible.

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