China’s Factories Report Surge in Activity After Lockdowns End
In February, manufacturing activity climbed to its highest point in over a decade. This is a sign of China's recovery from the restrictions that had paralyzed large swathes of the country.
Based on surveys of purchasing managers in China, the official index of manufacturing activity jumped in February to its highest point in over a decade. Also, the index of activity in the service sector also increased. Beijing lifted the restrictions in December after a year of unrelenting lockdowns and quarantines that had paralyzed large parts of the country. This abrupt change in policy led to a surge in infections. It is estimated that as many as 1.5 million people died from the Covid wave. After the release of statistics, Deutsche Bank analysts wrote that they had seen "a decent change in momentum risk as upbeat China data revived optimism for reopening trade that was flagging of late." The economic health of China ripples across other countries. China's 3 percent economic growth rate in 2022 was its lowest in almost 50 years. The International Monetary Fund predicts that growth will rebound this year and expects a 5.2 percent increase. It will take time for the damage caused by three years of China’s "zero Covid” policies to be repaired. Mitsubishi UFJ Morgan Stanley analysts noted that China's National Statistics Bureau cautioned against weak demand. According to Mr. Prasad from Cornell, despite the flaws, recent news suggests that China could experience relatively strong growth this year. The latest data "will relieve some of the pressure on China's leadership to announce substantial stimulus measures at this year's National People's Congress," he said.