China Economic Update

China Economic Update

China’s manufacturing sector expanded at a slower but stable pace in October, according to official data Tuesday.

The manufacturing purchasing managers’ index (PMI) came in at 51.6, moderating from 52.4 in September and 51.7 in August, according to the National Bureau of Statistics.

A reading above 50 indicates expansion, while below reflects contraction.

NBS statistician Zhao Qinghe mainly attributed the slowdown in expansion to a high base in September and influence from the week-long holiday.

“The growth in production and market demand eased,” he said.

Meanwhile, factory activity in high energy consumption and heavy pollution softened as the government stepped up efforts to strengthen environmental protection. Non-metallic mineral products and oil refining went down markedly.

“Despite the retreat, the indicator was still 0.4 percentage points higher than that of a year ago and staying at the average level of this year,” Zhao said, pointing to the impetus from high-end manufacturing and the production of consumer goods.

The manufacturing of automobiles, special equipment, electric apparatus, medical devices, food and beverage, textile and garment registered strong increases.

China’s non-manufacturing sector saw milder expansion in October, with the PMI at 54.3, down from 55.4 in September.

President Xi Jinping said Monday that China is a contributor to economic globalization and its opening up is a win-win outcome for China and the world.

Xi’s comment came while meeting with an advisory board of Tsinghua University school of economics and management, at the Great Hall of the People in Beijing.

Xi said the 19th Communist Party of China (CPC) National Congress is of great significance, and has enhanced China’s confidence on the path of socialism with Chinese characteristics.

China is pushing forward comprehensive reform with unprecedented determination and efforts and will continue to boost reform and development through opening up, Xi said.

While ensuring China’s sovereignty, security and development interests, the country will remain committed to reform and opening up and adopt a mutually-beneficial and higher-quality approach to opening up, the president said.

“As a beneficiary of and contributor to economic globalization, China’s development is the opportunity for the world. China’s opening up is not a zero-sum game but win-win cooperation,” Xi said.

As a Chinese saying goes, our friendship remains despite a failed deal.China will not set unfair clauses or take advantage of others, Xi said, adding that China will actively take part in the reform and construction of the global governance system, and promote the establishment of a community of shared future for mankind.

Talent is the foundation and core element of innovation, said Xi, noting that constructors and successors of socialism with Chinese characteristics, rather than bystanders or opponents, should be trained through education.

Xi said that China has made strategic decisions to speed up the construction of world-class universities and world-class academic subjects to enhance the country’s core competitiveness.

Xi said he is looking forward to receiving U.S. President Donald Trump in Beijing early next month.

China is willing to work with the U.S. side to look far ahead and aim high, take each other’s interests and concerns into consideration, properly solve differences and jointly promote China-U.S. cooperation so as to realize a mutually beneficial and win-win situation, Xi said.

“We are optimistic about the prospects for China-U.S. relations,” he said.

Xi encouraged his guests to provide more advice on China’s development, conduct more cooperation with the Chinese side, and offer a more objective and comprehensive introduction of China to the world.

Breyer Capital’s Founder and CEO Jim Breyer, chairman of the advisory board, and some other members, including Paulson Institute Chairman Henry Paulson, Chairman of the Blackstone Group Stephen Schwarzman, Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg spoke at the meeting.

They said they were deeply impressed by President Xi’s report to the opening session of the 19th CPC National Congress, noting that China deserves praise for its achievement in poverty relief and efforts to promote innovation and development, as well as its robust development in economic and social areas.

The guests expressed confidence in China’s future, saying that the international community expects to deepen cooperation with China in its reform and opening up process.

They also hoped to see fruitful outcome from Trump’s visit and the meeting between the two presidents in Beijing in November.

The advisory board was founded in 2000 and consists of scholars and entrepreneurs from multinationals, as well as Chinese officials.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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