Consumption recovers, China's manufacturing push hard

    Even accounting for seasonality, China's March PMI data provided a clearer picture of economic conditions after the Lunar New Year holiday than February's. Whether it is the supply side or the demand side, domestic or foreign, all parties have sent positive signals about the expected recovery of the economy.

    Most encouraging thing was the unexpectedly sharp rise in the non-manufacturing index, consumption will recover after the easing of pandemic control. The manufacturing PMI also recorded its largest increase in the months after the long holiday.

    The official manufacturing PMI rose to 51.9 in March from 50.6 in February, above the consensus forecast of 51.2. That was the biggest gain since China's economy reopened in last March.

    The higher-than-expected degree of the non-manufacturing PMI was even more astonish, rushing to a strong expansion level of 56.3, breaking the downward trend for three months that fell to 51.4 in February, and much higher than the consensus forecast of 52.0.

    Looking ahead, consumption will recover further, fiscal policy aimed to helping the economy withstand under the impact of the pandemic. The People's Bank of China may keep interest rates stable in 2021, focusing on providing targeted support and ensuring financial stability.