Three Powers Support the Smooth Operation of China's Economy

The China Federation of Logistics and Purchasing and the National Bureau of Statistics Service Survey Center released on August 1st, 2014, the China Manufacturing Purchasing Managers Index (PMI) was 51.1%, down 0.6% from the previous month. Chen Zhongtao, an analyst at the China Logistics Information Center, believes that although the index has fallen, it has remained above 51%, indicating that China's economic operation has remained stable.

Chen Zhongtao said that the reason why China's economic operation is basically stable has not changed. There are three main reasons for this: First, the fundamentals of the smooth operation of China's economy have not changed. At present, although the Chinese manufacturing PMI index has fallen, it is still at a relatively high level in the slight fluctuations during the recovery process. It is 0.6 percentage points higher than the first half average and 0.1 percentage point higher than the same period of last year. Major indexes such as production and new orders also remained at high levels above 52%. Judging from the surveyed industry, most industry PMIs have maintained an expansion range of more than 50%.

Second, the structural changes in the industry continue to show a good trend. "Two high" industries, namely high-end equipment manufacturing and high-tech industries, maintain a good momentum of development. The survey shows that since the beginning of this year, the PMI for general equipment manufacturing, special equipment manufacturing and computer communication and electronic equipment manufacturing have all remained at about 55%, which is significantly higher than the overall level of the national manufacturing industry. The downward trend is mainly the traditional basic raw material industry and overcapacity industries, such as the steel industry.

Third, companies are expected to be more stable. The expected index of production and business activities increased by 2.6 percentage points to 57.9%, which was 0.2 percentage point higher than the average for the first half of the year, reflecting that companies are still optimistic about the economic trend in the second half of the year. As each department continues to increase the intensity of policy implementation and the investment funds are gradually put in place, investment demand will rise steadily and positively. From the perspective of exports, although the new export order index will fall, short-term exports may face fluctuations, but due to external The overall environment continues to improve and the export situation this year will be better than last year. In general, the economy still has a stable foundation for its smooth operation.

Experts also believe that the decline in China's manufacturing PMI index also needs attention to prevent short-term fluctuations from forming a trend.

In August, China's manufacturing PMI index fell, mainly due to the drop in the new orders index, which also caused the production index to fall. In August, the new orders index reversed for five consecutive months, falling by 1.1 percentage points from the previous month and falling back to 52.5%, slightly higher than 0.1% in the same period of last year, reflecting the slowdown in demand recovery. The new export order index dropped by 0.8 percentage points and fell back to the 50% threshold. Since the beginning of this year, exports have continued to rise and the base has risen. The fall in the new export orders index indicates that it is difficult to increase exports in the later period.