China's economy saw an upsurge in January, official PMI shows

China's economic activity saw a growth in January and its factory activity expanded after four months of contraction, official data showed Tuesday. The economy has witnessed a rebound following the relaxation of strict Covid-19 curbs. The country went through a massive wave of COVID-19 infections that passed through faster than expected.

The official manufacturing purchasing managers' index (PMI) rose to 50.1 this month, from 47.0 in December, according to data from the National Bureau of Statistics (NBS). The PMIis a key gauge of factory output in the world's second-largest economy.

Domestic orders and consumption led to the output seeing a rise, as the first broad data showed how quickly China is recovering from the Covid wave after reopening. However, analysts warned that the economy faced persistent weakness in external demand.

A rebound in non-manufacturing activity was more decisive than the economists had expected. It was helped by a seasonal surge in spending for the Lunar New Year holiday. The non-manufacturing PMI, which covers the services and construction sector, stood at 54.4 in January, up from 41.6 in December.

Beijing's economy saw just a three per cent growth last year, its slowest pace in four decades excluding pandemic-hit 2020. Strict Covid curbs and a crisis in the property market hampered growth immensely.

Rising interest rates have put pressure on foreign economies, affecting the demand for China's exports, which last month were 9.9 per cent lower than a year earlier.

(With inputs from agencies)

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