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China’s factory activity records a slower growth in April 2021

China factory activity_IFM_Image
The industrial output recorded a 9.8 % increase in April, which is slower than March 14.1 percent increase

China’s factory activity was predicted to grow at a slightly slower pace in April while maintaining the momentum as the world’s second-largest economy on its way to recovery after the damage suffered by the Covid-19 pandemic. As predicted, it also missed forecasts in April as supply bottlenecks and rising costs burdened production, along with overseas demands losing momentum.

According to data released by the National Bureau of Statistics on Friday, PMI or the official Purchasing Manager’s Index released by the National Bureau of Statistics (NBS) fell to 51.1 from 51.9 in March. While the number remained above 50 points, but it was below 51.7, as predicted by the Reuters poll of 30 economists.

NBS statistician Zhao Qinghe said in a statement, “Some surveyed companies report that problems such as chip shortages, problems in international logistics, a shortage of containers, and rising freight rates are still severe.”

After the damage faced by the Covid-19 pandemic, China’s economic recovery quickly gained momentum during the first quarter of the year, recording a massive growth of 18.3 percent. Observing this, analysts and economists have predicted that China’s economy might grow by 8.6 percent in 2021 if it keeps the same pace.

The much-needed economic growth has also seen growth in manufacturing competitors such as India, a country that is still struggling to cope with the deadly second wave of the pandemic. Overseas demand in China has also witnessed an upward climb after the pandemic is brought under control in major markets such as the US and Europe, but chip shortages might continue for several quarters, which might result in a price surge in electronic goods.

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