China’s economy is performing weakly as the Communist Party’s viral Epidemic makes a comeback in the country, with the official manufacturing purchasing managers’ index (PMI) released Sunday falling to a multi-month low and slowing more than expected. Some analysts believe that consumer demand was particularly hard hit by the restrictions on travel for Chinese people in the Chinese New Year due to the implementation of the Communist Party’s embargo measures.
On January 31, the National Bureau of Statistics of the Communist Party of China released data on China’s manufacturing purchasing managers’ index (PMI) for January, showing that China’s official manufacturing PMI recorded 51.3 in January, compared to 51.9 previously, while China’s non-manufacturing sector recorded a PMI of 52.4 in January, compared to 55.7 previously, and also below the median estimate of 51.5 given by economists surveyed by the Wall Street Journal.
In addition to the weakness in the service sector, the Chinese PMI indicators released on Sunday also showed that the overall expansion of the manufacturing sector slowed down, with both the production and demand sides of the expansion weakening.
The data showed that the manufacturing production index fell to 53.5 in January from 54.2 in December last year, down 0.7 percentage points, and the new orders index fell to 52.3 from 53.6 in December last year, down 1.3 percentage points; in addition, the import and export boom fell, with the new export orders index and import index at 50.2 and 49.8 respectively in January, 1.1 and 0.6 percentage points lower than the previous month. In addition, the import and export boom has dropped, with the new export orders index and import index at 50.2 and 49.8 respectively in January, 1.1 and 0.6 percentage points lower than the previous month.
On Monday (Feb. 1), Caixin Media and research firm Markit announced that China’s manufacturing purchasing managers’ index (PMI) registered 51.5 in January, down 1.5 percentage points from the previous month and the lowest since July 2020.
Reuters reported on Feb. 1 that the latest Chinese official and Caixin manufacturing PMIs both fell to multi-month lows in January, underscoring the vulnerability of China’s economy to repeated shocks from the Communist Party’s viral outbreak and the high level of uncertainty facing exports.
The Wall Street Journal reported that official data released by the Chinese Communist Party on Sunday showed that China’s economy started the New Year on a weaker note, with the recovery in the country’s service sector weighed down by a renewed outbreak of the Communist Party virus in China and renewed blockades and travel restrictions that have dampened production activity.
According to the report, hundreds of millions of people usually visit friends and relatives in China during the Chinese New Year, and people spend heavily on shopping and dining. But this is likely to dampen economic activity as the Communist government will impose stricter quarantine and testing requirements for such a big holiday.
Those service industries that require people to be in close proximity to each other bear the brunt. A sub-index tracking business activity in the restaurant, accommodation, logistics, transportation and entertainment sectors fell sharply in January, entering contraction territory, official data showed.
Hunter Chan, an economist at Standard Chartered Bank, expects the damage to continue through the end of the Chinese New Year holiday, which is the end of February.
The recovery in China’s service and consumer sectors has lagged behind the overall domestic economy over the past year, and there are still concerns about infections from the Communist Party virus and reduced job incomes due to the outbreak.
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