China kicks off the year with a roar, its recent economic data echoes the sentiment, the purchasing managers’ index (PMI) for the manufacturing sector, a key economic barometer, came in at 50.1 in January, staying in the expansion territory for three months in a row.
In particular, manufacturing companies’ confidence was on the rise, with the sub-index for production and operation activity expectations at 57.5, up 3.2 percentage points from a month earlier.
China’s economic performance in the first quarter is expected to beat market expectations, said Li Chao, chief economist of Zheshang Securities, citing a PMI remaining above the boom-bust line for three consecutive months and steady credit growth.
The resilience of China’s industrial economy was also reflected in other barometers, including the total consumption of electricity.
One of the country’s industrial powerhouses, east China’s Jiangsu Province, saw its total electricity use rise 18.27 percent year on year during the holiday, while Hubei, a key manufacturing base in China, reported a 36.45-percent year-on-year increase in power use.
According to an estimate of the China Electricity Council, the country’s total electricity consumption will rise by 5 percent to 6 percent year on year in 2022.
To ensure a stable expansion, multiple measures have been rolled out including boosting the development of small and medium-sized enterprises, enhancing supply chain resilience, and giving full play to the role of emerging sectors like new energy vehicles (NEVs).
China aims to incubate about 3,000 “little giant” firms this year, referring to small enterprises in their early stage of development and focusing on high-end technologies.
“In 2022, more importance will be attached to promoting collaboration and innovation among small, medium-sized, and large enterprises,” said Xu Xiaolan, vice-minister of industry and information technology.
The NEV market could be another driving force shoring up China’s industrial growth. The country’s NEV sales ranked first globally for a seventh straight year in 2021.
Moving forward, Beijing aims to further facilitate the growth of this booming sector by relieving chip shortages, improving supporting facilities such as battery swapping stations, and carrying out the recycling and utilisation of NEV power batteries.
