Overseas demand continued to drag down overall demand.
According to a recently released business survey, the Chinese manufacturing sector's expansion slowed down in February, mainly due to a fall in overseas demand and the fragility of the Chinese economic recovery, which is linked to the spread of COVID-19.
The Caixin/Markit Manufacturing PMI fell to 50.9 in February, signaling an expansion of the sector, though still the lowest figure since May 2020 and below expectations that it would remain unchanged at 51.5. The Production Index stood at 51.9, the slowest growth rate since April 2020, while the New Orders Index dropped to 51.0, the lowest since May 2020.
“Overseas demand continued to drag down overall demand...surveyed manufacturers highlighted fallout from domestic flare-ups of COVID-19 in the winter as well as the overseas pandemic,” commented an analyst at Caixin.
The virus, which according to reports originated in Wuhan's wet market, has so far infected 89,912 individuals in China and led to 4,636 deaths. The situation seems under control, at least compared to other countries, though many doubt Chinese reports.
According to the Chinese National Bureau of Statistics, the Asian economy grew by 3% in 2020, which heavily contrasts the United States' 2.3% contraction last year, making China one of the few economies in the world that managed to grow last year. An economist from Bank of America claimed that by 2035 the Chinese economy could surpass that of the United States, with a good chance of doubling its size by then. This statement echoes President Xi Jinping's claims back in November.
The Chinese government expects the economy to rebound between 10% and 15% this year, given the current potential for recovery.
By 11:30 GMT, the US Dollar Index rose by 0.15%, hitting the 91.02 level.