In a good sign for China's struggling economy, factory activity grows for the first time in 6 months

BEIJING (AP) — China's factory activity in September recorded its first expansion in six months, an official survey said Saturday, providing another sign that the world's second-largest economy is gradually improving after its post-pandemic malaise.

According to the government statistics bureau and an official industry group, the monthly purchasing managers’ index rose to 50.2 this month from 49.7 in August measured on a 100-point scale. Numbers above 50 indicate activity is increasing.

Measures of production, new orders and employment all rose from August, the National Bureau of Statistics and the China Federation of Logistics & Purchasing said. But the bureau’s senior statistician, Zhao Qinghe, said the manufacturing industry still faces some difficulties in its recovery and development.

Since China lifted its tough COVID-19 restrictions, its leaders have been trying to boost the economy with a series of measures, and promising to support entrepreneurs who generate jobs and wealth.

Performances in some sectors have shown improvements, including in factory output and retail sales. But China's property crisis is still dragging on its economic growth.

Official data say the index measuring non-manufacturing commercial activities grew to 51.7 from August's 51. The composite index rose to 52 from 51.3.

Zhao said the improvement indicated by the latest indexes suggests the level of economic activity is rebounding. As government policies take effect, positive economic factors are increasing, he said.

However, China's economic rebound remained uneven. Real estate developers are struggling to repay heavy debts in a time of slack demand. Last month, investment in real estate fell 8.8% from the year before.

The heavily indebted Chinese property developer China Evergrande Group Investment suspended trading in its shares Thursday in Hong Kong. It said authorities had informed it that its chairman, Hui Ka Yan, was subjected to “mandatory measures in accordance with the law due to suspicion of illegal crimes."

Observers are watching how other near-term data will play out, including those on consumer spending during the eight-day autumn holiday period that began Friday. The break — which covered the Mid-Autumn Festival on Friday and also includes National Day on Sunday — is the longest week of public holidays since COVID rules were eased in December.

China State Railway Group Co. recorded a record daily high of 20 million passenger rail trips on Friday, official news agency Xinhua reported.

China's economy grew at a 6.3% annual pace in the second quarter of 2023, much slower than the 7%-plus growth that analysts had forecast based on the anemic pace of activity the year before. Roughly one in five young workers is unemployed — a record high that adds to pressures on consumer spending.