In September, China's official manufacturing purchasing managers' index (PMI) increased to 50.1 from 49.8 in August, aligning with analysts' expectations for modest growth. This uptick suggests a return to expansion, driven by increased activity in equipment, high-tech manufacturing, and consumer industries, as noted by NBS chief statistician Huo Lihui.
Additionally, the non-manufacturing PMI rose to 50.2, reflecting improved business activity in the services sector and the highest construction sector performance this year. Despite these positive indicators, concerns remain regarding weak domestic consumer demand and rising energy costs linked to geopolitical tensions in the Middle East, which are impacting profit margins.
Exports have been a key growth driver, but they are under pressure as trading partners express worries about China's manufacturing capacity and dependence on foreign markets. In response, Chinese policymakers have introduced targeted fiscal and monetary measures aimed at reducing financing costs and enhancing central bank lending to support economic growth.
However, economists from Nomura and Goldman Sachs caution that these measures may not be sufficient to stimulate significant growth, viewing them more as policy signals than immediate solutions.
Goldman Sachs highlighted a new mortgage subsidy aimed at boosting housing demand, which could lead to increased home sales in the short term, potentially accelerating first-home purchases over the next year