China's manufacturing PMI comes in at 49.1 in August; industrial upgrade continues

The purchasing managers' index (PMI) for China's manufacturing sector, which gauges activity in the sector, came in at 49.1 in August, but multiple indicators suggest that the momentum of industrial upgrading remain strong.

The PMI in August was slightly down 0.3 from the reading in the previous month, data from the National Bureau of Statistics (NBS) showed on Saturday.

Zhao Qinghe, an NBS statistician, attributed the slight drop to factors such as extreme weather, off-season production in some industries, insufficient demand and fluctuations in commodity prices.

The PMI for high-tech manufacturing increased to 51.7 in August, up 2.3 from July. The equipment manufacturing PMI rose to 51.2, up 1.7 from the previous month, according to data from the NBS.

The fact that the two sub-indexes have returned to expansion territory indicates that China's manufacturing industry remains stable, with continuing momentum in industrial upgrading, despite external economic pressure and industrial structural adjustments, Tian Yun, a Beijing-based veteran economist, told the Global Times on Saturday.

The recovery in high-tech and equipment manufacturing, as highlighted by the August PMI, aligns with another indicator released by the NBS on Saturday.

The New Kinetic Energy Index of China's Economic Development increased by 19.5 percent in 2023 compared with 2022. All sub-indexes showed improvement over the previous year, with the innovation-driven index rising by 22.3 percent year-on-year, contributing 34.4 percent to the total index growth, according to the NBS.

The New Kinetic Energy Index is a representative indicator for observing the upgrading of China's industries and the development of new quality productive forces. The double-digit growth reflects the sustained momentum of China's industrial upgrading, countering unwarranted pessimism about the country's economic prospects, according to Tian.

The non-manufacturing PMI came in at 50.3 in August, according to the NBS data, indicating a faster expansion in non-manufacturing business activity.