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China's manufacturing sector contracted in May for the third month running, albeit at a slower pace than previously seen, a key economic indicator published on Wednesday has shown.
Following the posting of a rise in the Purchasing Managers' Index for China's manufacturing sector by the National Bureau of Statistics on Tuesday, an alternative PMI compiled by business magazine Caixin broadly followed suit, showing a slight rise from 46 points in April to 48.1 points for May.
While the official index tends to more accurately reflect sentiment in large and state-owned enterprises, which are able to better profit from government stimulus measures, the alternative index produced by Caixin is seen as a better barometer of sentiment in medium-sized or privately-owned firms.
In both indexes, however, any result below the critical 50-point mark suggests that industrial activity is expected to decline.
‘Covid outbreaks in various regions continue to weigh on the economy,’ according to Caixin economist Wang Zhe. ‘Both manufacturing supply and demand have continued to weaken.’
Since March, China, which has been pursuing a rigorous zero-Covid strategy, has been contending with its biggest wave of infections since the pandemic first broke out over two years ago.
Strict lockdowns and quarantine measures in many metropolitan areas have slowed activity in the world's second-largest economy and disrupted supply chains. In addition, the Russian war in Ukraine has caused global commodity prices to rise, leading to increased production costs in China as well.
source: dpa
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