China's manufacturing PMI Photo: Xinhua

The manufacturing purchasing managers' index (PMI), a closely watched gauge of China's factory activity, is likely to come in at 40 to 45 points in March because of a plunge in export orders, analysts predicted. 

The figure is set for release on Tuesday. 

As of Saturday, 98.6 percent of domestic industrial enterprises with annual sales above 20 million yuan had resumed production, with 89.9 percent of workers back at their jobs, Xin Guobin, vice minister of the Ministry of Industry and Information Technology (MIIT), told a media briefing in Beijing on Monday.

About 76 percent of small and medium-sized enterprises (SMEs) have resumed operations, with 1 percent daily growth through March, according to Xin. 

"China's manufacturing activity in March recovered by more than 50 percent compared with February, which can pull up the country's PMI to more than 40," Liu Xuezhi, an economist at the Bank of Communications, told the Global Times.

The PMI in February stood at 35.7, the lowest since 2005 due to the impact of the pandemic on the country's businesses and production.

A reading of more than 50 indicates expansion, while one below 50 signals contraction.

Tian Yun, vice director of the Beijing Economic Operation Association, said that the March PMI will jump to 40 to 45 points, but will still be below the 50 threshold, hindered by a dearth of export orders. 

"According to our research, export orders placed before March were suddenly terminated and other orders were affected by delays or payment difficulties, putting some Chinese factories in a tough position to kick off production," Tian noted. 

Liu agreed, saying the pandemic has brought increasing uncertainties to China's export-dependent manufacturing sector and may even impede related foreign investment. 

Xin acknowledged at the press conference that at present, both overseas demand and domestic demand are declining, which has caused a huge shock to export-dependent enterprises. "If this problem cannot be resolved in time, those enterprises may face pressure to survive."

To help companies in the textile, garment, toy and furniture sectors, Xin said that online sales activities will be held to stimulate consumption and the ministry is thinking of holding online trade fairs to bring more orders to Chinese manufacturing enterprises.