China economy: Manufacturing sector returns to growth in March

China’s manufacturing sector unexpectedly returned to growth in March, a private survey showed.

The Caixin/Markit survey rose to 50.8 in March from 49.9 in February. A reading above 50 indicates expansion.

Official manufacturing figures released on Sunday also pointed to a jump in activity, and the data sent Asia stocks higher.

China has moved to boost growth in recent months as it struggles with a slowing economy.

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) rose to an eight-month high of 50.8 in March, beating the 49.9 forecast in a Reuters poll of economists.

The result echoed China’s official PMI data released on Sunday.

The official gauge showed manufacturing activity rose to 50.5 in March, bouncing off a three-year low of 49.2 in February.

The official PMI data looks at activity amid larger manufacturers, while the private survey from Caixin and Markit focuses on smaller to medium-sized companies in the sector.

The stronger-than-expected manufacturing figures pushed Asia stocks higher on Monday.

Hong Kong’s Hang Seng index jumped 1.7% while the Shanghai Composite shot above 2.3%.

Chinese stimulus

The upbeat factory data indicated that efforts to boost the world’s second largest economy may be starting to bear fruit.

China reported its weakest economic expansion in 28 years in 2018, and growth is expected to slow further.

Beijing has unveiled a series of measures – including cutting taxes – to help support the economy.