China’s factory activity has expanded for the first time in nine months, raising investors hopes that downward pressure on the world’s second largest economy is easing. Data released by China’s statistic bureau shows that the purchasing managers’ index (PMI) rose to 50.2 last month, up from 49 in February. Anything less than 50 represents a contraction. This suggests that a year-long effort by the Chinese government to stimulate the economy is paying off.
Despite the good news on manufacturing output front, job losses in the manufacturing industry do not appear to be slowing, although a government official survey suggests that this is at a slower pace than before. China hopes to cut overcapacity in the manufacturing industry and to retrain laid off workers as part of its larger plan to transition into a more service-based economy.