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The Chinese manufacturing sector is stabilizing as the truce of trade war

31 Dec 2019 10:59 AM

Data released today showed that the mood among manufacturers in China was stable in December, amidst a long-term trade war truce with the United States. However, in other sectors of the economy, including construction and services, some deterioration has appeared.

The official Manufacturing PMI (PMI) - a measure of confidence among factory owners in the second largest economy in the world - scored 50.2 in the last month of the decade, the same as the November reading and slightly above market expectations of 50.1. The reading for the current month is the highest reading since March.

Any number above 50 is a sign of positive activity in the industrial economy, while below this number indicates deflation.

On the other hand, the non-manufacturing PMI - a measure of confidence in the services and construction sectors - hit 53.5 in December, below analysts' expectations for 54.2. The figure also fell from 54.2 in November.

The Composite PMI, a combined reading for both manufacturing and non-industrial industries, was 53.4, down from 53.7 in November.

The official Manufacturing PMI is a measure of confidence among operators of large and state-owned factories. In the survey, companies are asked to express opinions on business issues such as orders for export, purchase, production, and logistics.