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Robust factory, service activities show resilience in real economy

Updated: Aug 31,2018 7:10 PM     Xinhua

BEIJING — China’s factory and service activities picked up in August, adding to signs that the economy is showing resilience amid government measures to bolster the real economy.

The country’s manufacturing purchasing managers’ index (PMI) came in at 51.3 this month, accelerating from 51.2 in July, the National Bureau of Statistics (NBS) said on Aug 31.

A reading above 50 indicates expansion, while a reading below reflects contraction.

The figure beat market consensus of about 51, mainly driven by the notably higher industrial product prices, said investment banking China International Capital Corporation in a research note.

In August, the input and output price sub-indices jumped to 58.7 and 54.3, respectively, from 54.3 and 50.5 in July, indicating that the yet-to-be-released producer price index for August may exceed expectations, according to investment bank Nomura.

August’s reading was flat, with an average reading of 51.3 for the first eight months of the year, according to NBS senior statistician Zhao Qinghe.

“Production continued to expand while market demand remained generally stable,” Zhao said.

Sub-index for production rose to 53.3 from 53 in July while the sub-index for new orders edged down from 52.3 in July to 52.2 in August.

The data on Aug 31 also showed that China’s non-manufacturing sector expanded at a faster pace, with the PMI for the sector standing at 54.2 in August, up from 54 in July.

The service sector, which accounts for more than half of the country’s GDP, registered fast growth, with the sub-index measuring business activity in the industry standing at 53.4, up from 53 in July.

Rapid expansion was seen in industries including air and railway transportation, retailing and telecommunications, the NBS said.

The data on Aug 31 came in amid looming concerns over a slowdown in the Chinese economy as investment growth showed signs of softening while external uncertainties remained.

Authorities have pledged coordinated efforts and policies to stabilize employment, finance, foreign trade, foreign investment, investment and expectations, with measures such as tax cuts and cheaper financing to support the real economy.

A State Council meeting on Aug 30 announced new measures that are expected to reduce the tax burden on businesses by more than 45 billion yuan ($6.6 billion) this year.

Favorable policies have been rolled out to shore up infrastructure investment, which showed signs of decelerated growth during the first seven months of the year.

Infrastructure investment will likely rebound in the future amid the policies, while the industrial sector will maintain steady growth, Huatai Securities said in a research note.