China's manufacturing PMI Photo: Xinhua

China's purchasing managers' index (PMI) for March bounced back to 53, beating market expectations of 40 as domestic economic and social activities accelerate resumption and the coronavirus comes largely under control in the country.

Manufacturing PMI recovered to expansion territory at 52, data from the National Bureau of Statistics (NBS) showed on Tuesday. This came after the index plunged to a record low of 35.7 in February as the COVID-19 epidemic rattled the country's businesses and production.

China's non-manufacturing PMI expanded to 52.3 in March, up from February's 29.6.

The better-than-expected PMI data showed China's manufacturing industry, which almost halted during the COVID-19 outbreak, has been restarted under the country's macro-control policy over past weeks, Dong Dengxin, director of the Finance and Securities Institute at Wuhan University, told the Global Times on Tuesday.

"Domestic manufacturer and investor confidence have been bolstered with a slew of support and stimulus policies released recently," Dong said.

But Zhao Qinghe, a senior statistician with the NBS, said in a statement on Tuesday that China's economic development, particularly the recovery of its industrial chains, faces new challenges as the country is under pressure from the risk of imported infections and as the global economy and trade have been severely impacted.

Dong said the hard-won recovery could be influenced by severe COVID-19 outbreaks overseas, but as domestic consumption is recovering and more measures are set to be launched to stimulate demand, other economic indicators will also bounce back from April.

Dong said the country's first quarter GDP will "still be very unsatisfying" due to the heavy blow from the virus.

Ma Jun, an external advisor to China's central bank monetary policy committee, said China should scrap its 2020's GDP target of 6 percent as it will be difficult to achieve with the economy facing huge uncertainties due to the impact of the new coronavirus.

Chinese investment bank China International Capital Corp wrote in a note that the country's nominal GDP may plunge to -7.3 percent in the first quarter.

Data from the NBS showed on Friday that the profits of China's large enterprises - those that post annual revenues of 20 million yuan - dropped 38.3 percent year-on-year to 410.7 billion yuan ($57.85 billion) in the first two months of 2020.

Global Times