China’s economic recovery picked up steam in June as exports and services benefited from government support policies and the reopening of some overseas markets, official data showed. The world’s second-largest economy remains far from a full recovery. However, economists say a series of recent signs of increased economic momentum points to China recording positive growth in the second quarter. That follows a sharp contraction in the first three months of the year, when much of the country was locked down to combat the coronavirus.
China’s official manufacturing purchasing managers index climbed to a three-month high of 50.9 in June from 50.6 in May, the National Bureau of Statistics said Tuesday. The separate nonmanufacturing PMI, a gauge of services and construction activity, jumped to a seven-month high of 54.4, from 53.6 in May. June’s readings came in better than economists’ forecasts and suggested a durable and broad-based improvement in China’s economy. Both indexes have now logged four consecutive months of readings above 50, indicating expansion. Readings below that level indicate contraction.
“China’s economic recovery is showing signs of acceleration,” said Zhang Liqun, an analyst with the China Federation of Logistics & Purchasing, which released the indexes in conjunction with the statistics bureau. Even so, despite an improvement in the headline reading and the subindex for total new orders—to 51.4 in June, from 50.9 the previous month—the recovery in demand still lags behind production, leaving some questions about the sustainability of the rebound, Mr. Zhang said in a statement accompanying the data release.
Measures of exports and imports both remained in contractionary territory, though they improved further off their post-pandemic lows. The new export orders subindex, a gauge of external demand, improved to 42.6 in June from 35.3 in May, while the subindex measuring imports also increased, to 47.0 from 45.3 in May.