China’s factory activity returns to growth, ends 5 months of contraction

Factory activity in China swung back into growth in October on the back of Beijing’s recent policy support, ending five straight months of contraction and signalling that the world’s second-largest economy might be on the edge of a recovery.

It exceeded the 49.5 projected by economists surveyed by Chinese financial data provider Wind.

A reading above 50 typically indicates an expansion of economic activity, whereas a reading below implies a contraction.

Within the official manufacturing PMI, the new manufacturing export order subindex stood at 47.3 in October, compared with a reading of 47.5 in September.

The rebound was driven by the recent rise in the price of some bulk commodities, said senior NBS statistician Zhao Qinghe, citing the 8.3 percentage point growth in the raw material purchase price subindex in October.