China’s factory activity worsened less than forecast, remaining in expansion even as disruptions to supply chains and rising input costs caused by the Iran war reverberate around the world.The official manufacturing purchasing managers’ index slipped to 50.3 in April from 50.4 in March, the National Bureau of Statistics said Thursday. The median estimate of economists surveyed by Bloomberg was 50.1.
The non-manufacturing measure of activity in construction and services fell more than forecast to 49.4 from 50.1 last month, the statistics office said. A reading below 50 indicates contraction.
While the economy has gotten off to a strong start this year, Chinese factories have been jolted by the spiking oil prices stemming from the war. At the same time, Beijing’s strategic oil reserves and investments in renewable energy are cushioning the fallout from the conflict on the broader economy.Trade volumes have held up well so far, with the flow of containers through Chinese ports mostly exceeding last year’s record levels despite slowing in weekly terms at the end of April. Though export growth weakened last month, global demand linked to artificial intelligence has helped buoy shipments.Even so, disparities are becoming more apparent as sectors buoyed by higher prices for oil, metals and chips are thriving while the rest suffer from rising raw material costs. The Chinese industrial hub of Guangdong, for example, has seen some electricity prices almost double due in part to constraints on the supply of natural gas from the Middle East.Investors are also closely watching President Donald Trump’s much-anticipated visit to Beijing which is slated to kick off on May 14 for any further signs on tariffs as well as trade and investment deals. The US and China have taken a series of actions against each other, including sanctions and investment curbs as the two sides jostle for position ahead of the leaders’ summit.Read Also: Mphasis shares in focus after Q4 results, board recommends final dividend of ₹62
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