China's factory activity grew at a slower pace in April as Beijing tries to consolidate an economic recovery

Within the official manufacturing PMI, a sub-index measuring new orders fell to 51.1 from 53 in the previous month, while a new export orders sub-index fell to 50.6 from 51.3, indicating that demand has yet to fully consolidate.

Meanwhile, the manufacturing sub-index stood at 52.9 in April, up from 52.2 in March.

„Although economic activity continues to expand, more manufacturers are facing higher costs,” said Zhao Qinghe, senior NBS statistician.

„Both the new order index and the new export order index for industries including automobiles and electrical machinery and equipment are above 53, indicating increased domestic and foreign market demand in related industries.”

Meanwhile, China's non-manufacturing PMI – a measure of sentiment in the services and construction sectors – stood at 51.2 in April compared with 53 in March, marking a fifth straight month of expansion.

The official composite PMI – a combination of manufacturing and non-manufacturing indices – fell to 51.7 in March from 52.7 in March.

Elsewhere, the Caixin/S&P Global Manufacturing PMI showed a similarly upbeat sentiment, rising to 51.4 in April. 51.1 in March.

The Caixin/S&P PMI focuses more on small and medium-sized private manufacturing firms, while the official PMI covers the broader manufacturing sector, including large state-owned enterprises.

„Overall, in April, the manufacturing sector continued to improve, with rapid expansion in supply and demand, sweetened by exceptional performance in overseas demand. Logistics and transportation performed steadily,” said Wang Che, senior economist at Caixin Insight Group.

“Procurement volumes and inventories increased on a positive outlook among businesses. However, employment has yet to show improvement, and price levels have remained low, especially on the selling side, driving profits.

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China's economic performance in the first quarter beat market expectations, with steady growth in manufacturing and a gradual recovery in consumption

Wang Che, Caixin Insight Group
The encouraging results follow better-than-expected growth in recent GDP growth 5.3 percent in the first quarter Retail sales and property investment, however, were weak links to the world's second-largest economy.

„China's economic performance in the first quarter exceeded market expectations, with steady growth in output and a gradual recovery in consumption,” Wang said.

„The strong start to the year is consistent with the Caixin manufacturing PMI, which has been in expansion territory for six months in a row.”

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