Activity in China’s manufacturing sector unexpectedly picked up in September even as factory employment slumped to a 5-1/2-year low, a survey showed on Tuesday, a potential source of worry for Communist leaders who prize social stability above all else.
The HSBC/Markit Flash China Purchasing Managers’ Index (PMI) rose to 50.5 in September from August’s final reading of 50.2. Economists polled by Reuters had expected factory growth to stall at 50, the level which separates expansion in activity from contraction, citing a further deterioration in business confidence and the rapidly cooling property market.
But a measure of employment shed more than a point to drop to 46.9, its lowest since February 2009 during the global financial crisis, when a collapse in exports threw tens of millions of Chinese out of work. A hefty drop in employment could raise alarm bells for the Chinese government, which has indicated it will tolerate slower economic growth as long as employment is not affected.