Investor Alert

Aug. 31, 2020, 10:31 p.m. EDT

China's Caixin PMI soars to near-decade high

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By MarketWatch

A private gauge of China's manufacturing activity rose to its highest level in nearly a decade last month, supported by strong domestic and external demand and faster production activity.

The Caixin China purchasing managers index, which is weighted toward small, private manufacturers, rose to 53.1 in August from 52.8 in July, Caixin Media Co. and research firm Markit said Tuesday.

August's reading, the highest level since January 2011, marked the fourth consecutive month the Caixin PMI held above the 50 mark separating contraction from expansion.

Production and new orders expanded at sharper rates than in July and companies reported the first increase in export sales in 2020, Caixin said. Total new work hit its highest level since January 2011 as the domestic and global economy continued to recover from the coronavirus pandemic, it said.

"Overall, the post-epidemic economic recovery in the manufacturing sector continued. Supply and demand expanded with the pickup in overseas demand," Wang Zhe, a senior economist at Caixin Insight Group, said in a statement accompanying the data.

The subindex of employment stayed in negative territory for the eighth straight month, but it was the closest to positive territory this year as companies registered a further increase in backlogs of work, Caixin said.

China's official manufacturing PMI, focused more on large, state-owned companies, edged down to 51.0 in August from 51.1 in July, according to data released by the National Bureau of Statistics on Monday. The official survey of manufacturers has a much larger sample than the private survey.

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