Workers manufacture suitcases at a factory in Yaozhou District of Tongchuan City, northwest China's Shaanxi Province, March 12, 2020. (Xinhua/Liu Xiao)

China's factory activity is rapidly recovering following nationwide work resumption efforts over past weeks. The Caixin/Markit manufacturing purchasing managers' index (PMI) hit 50.1 in March, rebounding from a record low of 40.3 in February.

The March PMI reading was higher than the forecast 45.0. A number above 50 indicates an expansion in activity, while a reading below that signals a contraction.

Experts said the encouraging data shows stimulus measures the country has released over recent days are working and have proven far more effective than expected, and other economic indices will also recover accordingly with major industries restored to normalcy in the country.

As part of the latest measures to revive an economy battered by the coronavirus outbreak, Chinese banks have been granted 1 trillion yuan ($140.87 billion) in extra relending for small and medium-sized enterprises (SMEs), the largest funding amount so far during the epidemic, according to a statement following an executive meeting of the State Council, China's cabinet, on Tuesday.

The results of the private survey are also in line with earlier figures released by the National Bureau of Statistics (NBS) on Tuesday. Data released by the NBS showed the PMI for March bounced back to 53, beating market expectations of 40 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.

Analysts and officials cautioned the sharp increase in March is more due to the low reading in February, and that it does not mean the economy has recovered from the pandemic impact.

A real improvement in economic operations will have been achieved only when the PMI changes in the same direction for over three consecutive months, an NBS official said on Tuesday. The official noted that a single month's expansion only reflects an improved operating situation over the previous month, but it does not mean that the actual production and operations of a company have returned to normal.

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.

Global Times