The mood in the boardrooms of Chinese companies is as well as since almost ten years, because China is the Coronavirus seems to have been largely in the grip. The purchasing managers ‘ index (PMI) of the business magazine “Caixin” for the manufacturing sector rose in October to 53.0 in the previous month to 53.6 points. The important economic barometer reached its highest level since January 2011, as the newspaper reported on Monday. Over 50 points on the Index indicates industry Expansion, while a contraction is expected.
In China, the first infection with the Coronavirus had been discovered in December 2019. Meanwhile, the second-largest economy, has brought the pandemic, with strict quarantine measures, mass testing, contact tracing and travel restrictions, under control. Today, in the people’s Republic of only a few small local outbreaks, most recently in Kashgar, in Northwest China publicized cases, otherwise only a few imported. So, everyday, and economy can normalize activity.
“Entrepreneurs are confident”
The manufacturing sector rebounded in October, more by both demand and supply improved. “Companies are very inclined to their warehouse to expand,” said Caixin Economist Wang Zhe. “The prices are stable. The business operation is improved, and entrepreneurs are confident.”
The new wave of infections with the Virus in other countries, however, the demand from abroad for products “Made in China” again grow at a slower pace, even if the new export orders in October rose for the third month in a row. “The twists and turns in the case of the infections abroad remain a headwind for exports,” said Wang Zhe.
Equity markets continue to recover, but due to the global virus situation skeptical
Asian stock markets recovered on Monday as a result of sound economic data from China of a month. The Chinese Caixin/Markit-Index made investors hope that the country could again reach the pre-pandemic level. Impact as in Europe and the United States due to the second Coronavirus-wave, therefore, could remain in China saves. Disappointing results and prospects of some of the largest companies in the Wall Street – such as Apple and Facebook last week – have hit on the mood of the traders. “The markets look to the fourth quarter and at the beginning of 2021. The growth prospects seem given the trend to more stringent restrictions in Europe is tarnished,” wrote analysts from Perpetual. The crucial question is now, how long the restrictions were necessary to bring the Virus under control.
