Workers at an intelligent machinery manufacturing enterprise in Weifang, Shandong province, March 31, 2024. (PHOTO: VCG)

Edited by QI Liming

The purchasing managers' index (PMI) for China's manufacturing sector came in at 50.8 in March, bouncing back to expansion territory, data from the National Bureau of Statistics showed on March 31. Experts said the accelerated recovery of China's manufacturing sector has contributed to the steady growth of the global economy, and other positive economic signals also highlight China's contribution to the economic recovery.

According to Bloomberg, investors are turning more optimistic about China's economy after China's official manufacturing PMI registered the highest reading in a year, alongside strong exports and rising consumer prices.

"Emerging optimism about China is real," said Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank in Singapore. It may gain traction given "corresponding optimism elsewhere in Asia that dovetails with an upturn in global manufacturing," he said.

According to CNBC, Wang Zhe, a senior economist at Caixin Insight Group, said, "Overall, the manufacturing sector continued to improve in March, with expansion in supply and demand accelerating, and overseas demand picking up."

The latest growth extended the rising trend shown by the non-manufacturing PMI in previous months, adding to the evidence that business activities in China's non-manufacturing sectors continue to gain steam.

According to The Wall Street Journal, China's service sector continued to regain momentum, Capital Economics economists said, with the PMI average rising. The positive service-sector readings come as China's factory activity also signaled a stabilizing economy. This has prompted some economists to raise the growth forecasts for China, saying the pessimism about China's outlook is overdone.

"It's time to review the very bearish view on China growth," Citi economists said in a note. With all the upside surprises in data so far this year, the economy could be on track to hit China's target for GDP growth of around five percent this year, they wrote. Citi has upgraded its forecast for China's 2024 growth to five percent from 4.6 percent, citing improved policy delivery and upbeat consumption and investment figures.

HSBC CFO Georges Elhedery said the lender was confident in China's economy. "We're looking at major economic transition which is taking place, which gives us very strong grounds to be very positive about the medium- and long-term outlook," Elhedery said.

He remarked that China's economic maturity has reached such a stage that now is the "right time to transition into what more mature economies are." He characterized this maturity as being more reliant on consumers, the service industry and high-value and sustainability-driven products, such as electric vehicles and batteries.

According to the latest report released by the ASEAN+3 Macroeconomic Research Office, China's economy is set to expand by 5.3 percent this year, which will help to lift growth in the region. A gradual property sector recovery in China amid ongoing policy support would boost real estate investment, generating spillovers for the rest of the region, the Singapore-based group said on April 8.