How China’s Manufacturing Industry Is Performing


Aug. 18 2020, Updated 5:30 a.m. ET

China’s manufacturing purchasing managers’ index

In March 2017, China’s manufacturing PMI (purchasing managers’ index) score, a key indicator of the country’s economic health, stood at 51.8 (MCHI) (FXI). That was slightly higher than the 51.6 seen in February 2017. Its PMI score has risen for nine months straight.

The reading was well above Reuters’s estimate and above 50 for the eighth consecutive month. A PMI reading of 50 is considered neutral, reading below 50 signifies contraction, and a reading above 50 signifies expansion. China’s score was above 50 nine times in 2016. The index gives more weight to large state-owned companies than to small private manufacturers.

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Caixin manufacturing PMI

The Caixin Manufacturing PMI reflects the outlook of small private manufacturers. It stood at 51.2 in March 2017, compared with 51.7 in February 2017. China’s factory output accelerated and new orders increased in March.

China’s economy and crude oil

China’s oil demand is closely related to its manufacturing activities. Higher manufacturing activities translate to higher demand for oil, which translates to higher demand for crude oil tankers. When crude oil demand falls, it negatively affects China’s crude oil imports and crude tanker companies such as Frontline (FRO), Teekay Tankers (TNK), Tsakos Energy Navigation (TNP), Nordic American Tankers (NAT), DHT Holdings (DHT), Gener8 Maritime (GNRT), Navios Maritime Midstream Partners (NAP), and Euronav (EURN).


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