A Chinese manufacturing gauge rebounded in March, suggesting stimulus efforts have started to bolster factories in the world’s second-largest economy. The government’s manufacturing Purchasing Managers’ Index was 50.1 last month, from 49.9 in February, according to the statistics bureau and the China Federation of Logistics and Purchasing in Beijing. Numbers above 50 signal expansion.
Premier Li Keqiang last month said policy makers will step in if growth slows too sharply, while central bank Governor Zhou Xiaochuan flagged room to act. Wednesday’s reading suggests China’s factories, marred by deflation and overcapacity, may be picking up after two interest-rate cuts in the last six months and strengthening in U.S. demand.
“It seems China’s pro-growth measures have achieved some results on the ground,” Zhou Hao, an economist at Australia & New Zealand Banking Group Ltd., said from Shanghai. “However, the downward pressure on China’s economy remains, requiring authorities to take additional measures to help growth.”