China's Manufacturing Remains Sluggish... Caixin PMI Shifts to 'Contraction Phase'

The operating conditions of manufacturing companies in China have entered a contraction phase.

On the 4th, Chinese economic media Caixin reported that the April Manufacturing Purchasing Managers' Index (PMI), surveyed jointly with Standard & Poor's (S&P), was recorded at 49.5. This figure is below both the previous month's figure (50) and market expectations (50.3). The PMI is based on surveys of company personnel responsible for purchasing and human resources; a reading above 50 indicates expansion in business conditions compared to the previous month, while a reading below 50 indicates contraction.

This figure had remained below 50 for five consecutive months until January, then improved above the baseline in February and March. However, in April, it returned to a contraction phase, putting a brake on economic outlooks.

Earlier, the official manufacturing PMI released by China's National Bureau of Statistics on the 30th of last month also fell to 49.2, marking a return to contraction after four months. The official PMI mainly focuses on large domestic state-owned enterprises, whereas Caixin's private PMI includes small and medium-sized enterprises and export companies.

Wang Zhe, an economist at Caixin, stated, "The deterioration in manufacturing in April indicates that the foundation for economic recovery is not solid," and emphasized, "Moreover, weak employment is the most prominent issue currently facing the economy." Economist Wang further noted, "Recently, deflation has become a key topic in the market, and the sharp drop in price indices requires careful attention," adding, "Going forward, policy focus should be on supporting domestic demand stimulation and employment stability."

This content was produced with the assistance of AI translation services.