China Caixin Services PMI at 52... Expansion Phase

Economic Stimulus Measures Effectiveness

Chinese financial information provider Caixin (財新) announced on the 5th that the Caixin Services Purchasing Managers' Index (PMI) for October rose by 1.7 percentage points from the previous month (50.3) to 52.

Major foreign media outlets analyzed this as an early sign showing that the business environment is improving due to China's large-scale economic stimulus measures.

Under-construction building located in Huizhou, Guangdong Province, China
[Image source=Reuters Yonhap News]

The Caixin PMI is an indicator based on surveys of corporate purchasing managers that reflects economic trends. A value above 50 indicates economic expansion, while below 50 indicates contraction.

The previously released October Caixin China Manufacturing PMI recorded 50.3, up 1 percentage point from the previous month. With both the services and manufacturing sectors growing, the composite PMI rose 1.6 percentage points from the previous month (50.3) to 51.9, marking the highest level since July.

According to the National Bureau of Statistics of China’s announcement on the 31st of last month, the manufacturing PMI and services PMI increased by 0.3 percentage points and 0.2 percentage points respectively, reaching 50.1%. The composite PMI rose 0.4 percentage points from the previous month to 50.8.

China’s third-quarter gross domestic product (GDP) grew 4.6% year-on-year, leading to concerns that the target economic growth rate of around 5% may be in jeopardy. In particular, the prolonged slump in the real estate market, a major cause of economic slowdown, continues. In response, Chinese authorities have introduced various stimulus measures since the end of September, including interest rate cuts and support for the real estate and stock markets.

Wang Zhe, Chief Economist at the Caixin Think Tank, stated, "A series of gradual stimulus measures began at the end of September. According to Caixin manufacturing and services PMI data, market demand has stabilized, optimism has recovered, and policy effects have started to appear." He added, "Achieving China’s economic growth target this year depends on the continuous recovery of consumer demand," and emphasized, "Increasing disposable income on a larger scale should be the focus of gradual policies."

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