Source: GT Pulished: 2024-05-21

The National Development and Reform Commission (NDRC), China's top economic planning agency, said on Tuesday that favorable conditions are accumulating in the manufacturing sector and propelling the sector's recovery. The trend highlights the steady unfolding of the benefits of macroeconomic policies, the agency noted.

Industrial production remains on a stable upward trajectory, leading to higher profitability, sustained positive sentiment and increased market participation, NDRC spokesperson Li Chao told a press briefing. Li said that the manufacturing sector will maintain its trend of recovery and structural optimization.

The comments followed positive data for China's manufacturing sector from January to April. Experts said that Li's remarks, along with the sector's good performance, signify accelerated momentum, ample growth potential, and optimistic outlooks for the manufacturing sector and economic growth.

China has taken comprehensive steps from both the investment and consumption sides to facilitate the development and upgrading of the manufacturing sector, and these efforts have yielded positive outcomes, Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at the Renmin University of China, told the Global Times on Tuesday.

'Although some action plans are still in the early stages, the market has started to develop optimistic expectations, which will inject strong impetus for the expansion of domestic consumption and sustained growth in the manufacturing sector,' Dong added.

Manufacturing investment increased by 9.7 percent from January to April, with the rate outpacing that of overall fixed-asset investment by 5.5 percentage points, according to official data that Li cited.

First-quarter profits of industrial enterprises above the designated size increased by 4.3 percent year-on-year, a third consecutive quarter of growth. This growth will support manufacturers' efforts to expand production, Li said.

In April, the official manufacturing purchasing managers' index (PMI) for production and business activity expectations stood at 55.2, remaining within the high prosperity zone. The figure suggests that manufacturers are confident about market growth, Li noted.

In China's endeavor to advance manufacturing, emerging sectors such as electric vehicles, solar panels and batteries are experiencing a rapid growth both in domestic and foreign markets, with the scale of investment and expansion accelerating, Li Chang'an, a professor at the Academy of China Open Economy Studies of the University of International Business and Economics, told the Global Times on Tuesday.

The trend underscores 'an overall upgrade in China's manufacturing structure,' Li said. Due to the high uncertainty in overseas markets, manufacturing optimization is imperative for stabilizing industry growth and fostering new economic growth points in China.

The NDRC pledges to accelerate the cultivation of new quality productive forces in a bid to bolster the quality and efficiency of manufacturing development.

Forthcoming measures will be focused on expanding effective investment, stimulating domestic consumption, accelerating the trade-in of old consumer goods, and advancing the transformation and upgrading of the manufacturing industry.

Aside from expanding the domestic market, manufacturing upgrades also require tapping into promising international markets, Dong said, adding that 'on a global scale, China possesses unparalleled capabilities in resource integration, spotlighting our competitive edge.'

It's important to expand cooperation with overseas markets, especially developing countries and regions, which offer significant potential for consumption and industrialization, he said.

Buoyed by improved domestic and overseas demand, the manufacturing sector continued its uptrend, according to Caixin media. In April, the Caixin China Manufacturing PMI came in at 51.4, the highest since March 2023, reflecting a continued acceleration in manufacturers' production and business activity.

Data from the National Bureau of Statistics showed the manufacturing PMI was 50.4, remaining in the expansion zone for two consecutive months.