Caixin index beat official data, exposing the continued slowdown of China’s manufacturing industry

A work scene at an eyewear company in Wenzhou, China. Workers are wearing masks and goggles as they polish eyeglass frames on a machine.

China’s manufacturing PMI (Purchasing Managers’ Index) for March 2021, recently released by Caixin Media in mainland China, recorded 50.6, having fallen to an 11-month low. However, the relevant PMI data previously released by the National Bureau of Statistics of the Chinese Communist Party recorded 51.9, up from February. These two sets of data “fighting” phenomenon, attracted the attention of foreign media.

On Thursday (April 1), Caixin Media, a leading provider of financial news, high-end financial data and information, released its latest “Caixin China Manufacturing PMI” data, showing that China’s manufacturing PMI registered 50.6 in March 2021, down 0.3 percentage points from 50.9 in February. A related report by on Thursday noted that the figure, while still in expansionary territory (above 50), has fallen to its lowest value since May 2020, indicating a further slowdown in the expansion of China’s manufacturing sector in the wake of the New Crown epidemic (i.e., the Chinese Communist pneumonia outbreak). The report also disclosed that the rate of expansion of China’s manufacturing supply and demand has slowed down for four consecutive months.

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Yet just a day earlier (March 31), data released by the National Bureau of Statistics of the Communist Party of China (NBSC) showed that the manufacturing PMI recorded 51.9 in March 2021, up 1.3 percentage points compared to February, ending three consecutive months of decline.

AFP noted that the PMI indicator published by Caixin Media “fought” with the PMI index released by the National Bureau of Statistics of the Communist Party of China, pointing out that the two sets of data formed a “stark contrast”.

According to AFP, Caixin’s manufacturing PMI data is provided by IHS Markit, a leading provider of vital information, analysis and solutions for key industries and markets around the world. The Caixin index is more focused on small businesses and exports, which seems to indicate that the Chinese economy is now increasingly dependent on the domestic market, the report noted.

In addition, the Caixin report on Thursday also revealed that mainland China’s employment index was in contraction territory for the fourth consecutive month in March this year, driven by a slowdown in supply and demand growth across the market. Meanwhile, inflationary pressures on the Chinese economy have increased further, with the price index continuing to soar.

The report describes that China’s March 2021 purchase price index recorded its highest value since December 2017. As a result of rising costs, the prices of products produced by companies leaving the factory have also risen sharply. For example, the ex-factory price index for manufacturing firms has now risen to its highest value since December 2016.

The report cited an analysis by Wang Zhe, a senior economist at Caixin Intelligence, as saying that inflation remains a key concern going forward, with the price index having risen for several months in a row and inflationary pressures increasing, limiting the room for future policy to vacate and being detrimental to the recovery of the economy in the post-epidemic period.