Is China’s Manufacturing Sector Improving?


Dec. 4 2020, Updated 10:53 a.m. ET

China’s October PMI

In November 2017, China’s manufacturing PMI (purchasing managers’ index) was 51.8. The PMI rose from 51.6 in October, which indicates a rise in China’s manufacturing activity. The PMI shows a country’s economic health.

November’s PMI reading was the second-highest in 2017 behind September’s PMI of 52.4. The index remained above 50 for the 16th consecutive month. A reading above 50 indicates expansion, while a reading below 50 indicates contraction.

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November Caixin PMI

The Caixin manufacturing PMI shows the outlook for small and private manufacturers, while the official PMI gives more weight to large state-owned companies. The Caixin PMI for November 2017 was 50.8—it fell slightly from 51 last month. It has been above 50 for six consecutive months.

In November, new export orders increased from the previous month. Also, overall business rose at a faster pace. It suggests that domestic demand was also strong. Business confidence around the 12-month outlook remained positive.

Oil demand

Manufacturing activities drive the oil demand. As the manufacturing industry expands, the demand for oil increases and vice versa. An increase in oil demand benefits the crude oil tanker industry. Some of the major crude oil tanker companies are Nordic American Tankers (NAT), Euronav (EURN), General Maritime Partners (GNRT), Tsakos Energy Navigation (TNP), and Navios Maritime Midstream Partners (NAP).


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