China's manufacturing activity rose unexpectedly in September

After two consecutive months of decline, China's manufacturing activity rose in September. This was made possible by a set of stimulus and easing measures under COVID.

According to official data, the manufacturing Purchasing Managers' Index (PMI) reached 50.1 in September, surpassing the expected 49.6 and the previous month's reading of 49.4. 

An independent Caixin survey showed that the nation's manufacturing PMI fell to 48.1 in September from a level of 49.5 in the previous month.

What makes the Caixin figures different from those provided by the government is the coverage of the companies surveyed. Caixin polls a smaller focus group, consisting largely of private businesses. The government, in turn, surveys a larger focus group of state-owned businesses. 

The lifting of covidic restrictions in the economic centers of Chengdu and Shenzhen was a kind of "catalyst" for manufacturing, as this factor enabled factories to resume production at increased capacity. The manufacturing sector is considered an indicator of the health of the world's second largest economy.

Despite this, the covidual restrictions caused disruptions in other sectors of the economy as well. China's non-manufacturing sector Purchasing Managers' Index fell to 50.6 in September from 52.6 the previous month.

The composite PMI shows overall economic activity. It fell to 50.9 in China in September from 51.7 in the previous month. A series of COVID lockdowns, combined with power shortages and a weakening yuan, have seriously depressed China's economic activity this year. 

However, in the meantime, the government has taken a number of stimulus measures to support economic growth. These include increased spending on infrastructure and lower interest rates by the central bank.

The main reason for China's economic problems this year is the zero-cost COVID policy. Despite this, China has shown no desire to end it.

This has also had a negative impact on the yuan, which recently fell to a record low.