Column: Chinas manufacturers enter downturn – but for how long? – Reuters.com


REUTERS/Stringer Register now for FREE endless access to Reuters.comRegisterLONDON, March 31 (Reuters) – Chinas manufacturing sector contracted this month as coronavirus outbreaks, city-level lockdowns, increasing input costs and the severe disruption of international supply chains take their toll on output and new orders.The official buying supervisors index for the manufacturing sector slipped to 49.5 in March from 50.2 in February, the National Bureau of Statistics said on Thursday.The manufacturing index fell into simply the 9th percentile for all months given that 2011 down from the 36th percentile last month and the 91st percentile a year ago.Register now for FREE unrestricted access to Reuters.comRegister(Chartbook: https://tmsnrt.rs/3iSKMMc)The output sub-index, which has been slowing down for over a year, fell to 49.5 this month and is now in just the 2nd percentile for all months given that 2011. Manufacturers are being struck by more obstacles quickly after recovering from the coal crisis that forced electrical power rationing last autumn.China is the worlds largest or second-largest consumer and importer of a lot of energy items and commercial raw products, so the downturn will undoubtedly spill over into global markets.The only question now is whether the recession will be brief and shallow or turn into something more prolonged and deeper, which would increase recessionary pressure worldwide.The answer depends on (a) the sustainability of the nations dynamic-clearing approach to coronavirus containment; (b) the deterioration of the worldwide economy in action to rising energy prices and the conflict in Ukraine; and (c) the effectiveness of the federal governments measures to revive demand.The downturn associated with the coal and electricity crisis lasted less than four months, however that was mostly a supply crisis triggered by a momentary scarcity of fuel; this crisis is occurring on both the supply and need sides of the economy at the same time and is far more complex.Related columns:- Chinas cooling economy takes some heat out of commodity costs (Reuters, March 30) checked out more – Economic war presses company cycle to tipping point (Reuters, March 23) read more – Western economies on verge of economic crisis as Russia sanctions escalate (Reuters, March 8) read more – Global economic crisis risks rise after Russia invades Ukraine (Reuters, March 4) read more – John Kemp is a Reuters market expert.


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