**Abstract**
As the year draws to a close, China's manufacturing sector has shown signs of recovery, supported by a series of favorable national policies. In recent months, various indicators have signaled a warming trend in the Chinese economy, giving hope that the long-awaited turnaround is on the horizon. Recently, the National Bureau of Statistics and the China Federation of Logistics and Purchasing released new survey data, showing that the Manufacturing Purchasing Managers’ Index (PMI) rose to 50.06% in November, up 0.4 percentage points from October. This marks a slight but steady rebound over three months, suggesting that the overall economic operation is becoming more stable.
Despite this positive sign, some experts caution that the recovery remains fragile. The rebound in aggregate demand is limited, and there are still uncertainties regarding how strong and lasting the recovery will be.
**China’s Strong Economic Recovery**
The PMI had been declining since hitting 53.3% in April, falling for five consecutive months and dipping below the 50% threshold in the third quarter. As a key leading indicator, a reading above 50 indicates expansion in the manufacturing sector. This month’s 50.06% is the first time in seven months that the index has crossed into positive territory.
According to Bai Pengming, a macroeconomic researcher at China Investment Consulting, the rise in PMI reflects an improvement in the manufacturing environment. He noted that the effects of previous "maintenance" policies are beginning to take shape, with increased liquidity from banks positively impacting the real economy.
Meanwhile, the new orders index rose sharply to 51.2% in November, up 0.8 percentage points from the previous month. Zhang Liqun, a researcher at the State Council Development Research Center, said that the PMI rebound was driven by improved new orders, export orders, and backlogs. Additionally, inventory levels also showed a slight increase, indicating that companies are starting to replenish stocks rather than continue destocking.
**Economic Recovery Is Still on the Road**
While many PMI components improved, some remained weak. The purchase price index dropped significantly to 50.1%, down 4.2 percentage points from the previous month. Zhang Liqun warned that this could signal lingering uncertainty in market confidence and a weaker-than-expected recovery.
Notably, over half of the 21 industries surveyed have seen their indices rise above 50%. Large enterprises have shown stronger performance, with their PMI reaching 51.4%—up 0.5 percentage points from the previous month. However, Bai Pengming emphasized that while the PMI has risen, it does not reflect a fundamental shift in the broader manufacturing environment or a clear upward trend in the overall economy.
Fan Jianping, chief economist at the National Information Center, pointed out that while inventory growth has slowed, it remains higher than the nominal growth of industrial output. This suggests that inventory levels are not declining, which is a positive sign.
Still, Bai Pengming stressed that China’s economic recovery is a long process and may not stabilize soon. Some of the recent improvements are linked to prior stimulus measures, not direct support for the real economy. Small and medium-sized enterprises continue to face challenges, and key indicators like industrial electricity consumption have yet to fully rebound.
In addition, external risks such as the U.S. “fiscal cliff†remain a concern, adding to the uncertainty surrounding China’s economic outlook. While the manufacturing sector shows promise, the road to full recovery remains challenging.
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