Latest reports from Beijing show China’s manufacturing activity expanded in June for the fourth consecutive month, indicating further tentative signs of an economic recovery.
The China Federation of Logistics and Purchasing has reported that its official Purchasing Managers’ Index (PMI) for the manufacturing sector hit 53.2 in June, up from 53.1 in May.
A reading above 50 means the sector is expanding, while a reading below 50 indicates an overall decline.
China’s stimulus program is said to be having a demonstrable effect on domestic spending which has resulted in increased manufacturing activity.
Beijing announced a four-trillion-yuan ($585bn) stimulus package last year in a bid to prop up growth in the world’s third largest economy by boosting spending on infrastructure and other government-backed projects.
China’s PMI sank to a record low of 38.8 in November due to the global financial crisis, but has improved continuously in the five months until April, moving above 50 in March.
Unlike Australia (around 10% at present), manufacturing accounts for more than 40% of the economy in China, which has been hit hard by evaporating demand for its products in key export markets such as the US and Europe.