Workers weld at a workshop of an automobile manufacturing enterprise in Qingzhou City, East China's Shandong Province, June 30, 2020.  (Photo by Wang Jilin/Xinhua)

China's factory activity recorded its highest level of expansion in nearly a decade in August, a private survey showed on Tuesday, pointing to a solid recovery of the economy that's now largely insulated from the global COVID-19 pandemic and the US's technology war with China. 

The Caixin/Markit manufacturing Purchasing Managers' Index (PMI), weighted toward smaller private businesses, came in at 53.1 in August, its strongest reading since early 2011. A reading above 50 indicates expansion, while one below 50 signals contraction. 

Both production and new orders expanded at a brisker pace than in July, and companies reported the first rise in new export sales since last December, according to the private survey.

Also encouragingly, the fall in manufacturing staffing levels in August was the slowest this year, an indication that employment was nearing stabilization as surveyed firms reported a continued increase in order backlogs. 

Tuesday's results showed that the private factory sector fared even better than its official counterpart.

The official PMI reading was announced on Monday, edging down to 51 in August from the previous month's 51.1. August was the sixth month in a row that the official reading stayed above the demarcation line. 

The August official non-manufacturing PMI rose to 55.2 from 54.2 in July, however, beating analysts' expectations. 

In a note sent to the Global Times on Tuesday, Goldman Sachs economists said that the outperformance of the Caixin PMI, more closely linked to export growth than the official reading, "hints at continued strength in export growth in August."  

The nation surprised the markets with a 10.4 percent jump in yuan-denominated exports in July, according to customs statistics, despite the fallout of the pandemic on global demand. 

An economic recovery well on track, as shown by the readings, also contrasts with the US' escalated clampdown on Chinese businesses.

The Trump administration has not only issued executive orders targeting TikTok and WeChat, but added more Chinese firms to its Entity List in an attempt to wall off China.

Lingering uncertainties associated with the US hostility also have market watchers calling for continued policy support to ensure an intact economic rebound.

"Macroeconomic policy support is essential, especially when there are still many uncertainties in the domestic and overseas economies. Relevant policies should not be significantly tightened," Wang Zhe, senior economist at Caixin Insight Group, said in a statement sent to the Global Times. 


Newspaper headline: Factory activities record biggest rise in a decade in Aug