Experts call for increased support to help businesses hit hard by COVID
China’s manufacturing activity contracted in April due to a resurgence in domestic COVID-19 infections coupled with uncertainties caused by geopolitical tensions.
Experts have called for increased policy support to help hard-hit companies resume production, smooth logistics channels and ensure the stability of industrial and supply chains to further invigorate the economy and boost consumer confidence. market.
Production and operation of enterprises will gradually improve as the pandemic is increasingly brought under control along with the government’s strong measures to stabilize economic growth, they added.
The purchasing managers’ index for China’s manufacturing sector came in at 47.4 in April, down from 49.5 in March, marking the lowest since March 2020, data from the National Bureau of Statistics showed on Saturday. A PMI reading above 50 indicates expansion, while a reading below this number reflects contraction.
The production sub-index stood at 44.4 in April, down 5.1 percentage points from March. The new orders sub-index came in at 42.6 from 48.8 a month earlier.
Many companies have reported growing difficulties in logistics and transportation, procurement of raw materials and key components, sales of finished products and inventory backlogs, said Zhao Qinghe, a senior statistician at the BNS.
However, high-tech manufacturing and consumer goods manufacturing remained relatively stable, with the PMI for high-end manufacturing coming in at 50.1, a slight drop of 0.3 percentage points from March and remaining in expansion territory. Its production sub-index rose 1.1 percentage points from the previous month.
China’s non-manufacturing PMI was 41.9 in April, down from 48.4 in March. The resurgence of COVID-19 cases hit the services sector the most in April, as 19 of the 21 segments surveyed, such as transportation, food and accommodation, were in the contraction range.
“The fundamentals of China’s long-term healthy economic growth have not changed, and relevant departments have further coordinated epidemic prevention and smooth supply of goods, intensified policy support to help businesses to overcome difficulties, which helps to boost business confidence,” Zhao said.
Noting that China’s economy still faces the triple pressure of contracting demand, supply shocks and weakening expectations, Wen Bin, chief researcher at China Minsheng Bank, said the country should step up efforts to help businesses resume operations in regions hard hit by the pandemic, ensure the smooth operation of logistics, and stabilize industrial and supply chains.
More efforts should be made to expand domestic demand, promote infrastructure construction and support consumption recovery to keep the country’s economy within a reasonable range, Wen added.
A meeting of the Political Bureau of the Communist Party of China Central Committee on Friday underscored the importance of economic stability and securing and improving people’s livelihoods as the country’s economy faces challenges. complexities and growing uncertainties.
As China continues to take strict epidemic prevention and control measures, it has taken strong steps to streamline transportation and logistics services and accelerate the construction of a unified domestic market.