Chinese manufacturing expands despite coronavirus

Growth is the slowest since August in contrast to more optimistic economic forecasts


The Chinese manufacturing sector has expanded in January despite the coronavirus outbreak, according to a report published by Markit and Caixin.

The Markit/Caixin manufacturing PMI came at 51.1 in January, which represents the slowest pace since August 2019. Economists expected the PMI to be as high as 51.3.

The number is slightly lower than in December, when the Markit/Caixin manufacturing PMI was at 51.5. All numbers above 50 mean expansion; those below the level indicate contraction.

Zhengsheng Zhong, director of macroeconomic analysis at Caixin subsidiary CEBM Group, said that the manufacturing activity was affected by slow demand. The total number of new orders was the weakest since September 2019.

The impact of coronavirus may not be fully represented in the survey, as it was conducted before January 20.

Because of the outbreak Lunar New Year holidays were prolonged in the country, resulting in a much lower output at most factories and ports. The influence of coronavirus on the Chinese economy will become evident by the end of February.

Major companies have adopted special rules for business trips to China as the coronavirus has spread across the country. The virus has reportedly killed 349 people in mainland China by February 3.

Facebook, LG and other businesses have restricted travel to the country and urged employees who stay in China not to leave their houses.

Some of the major airlines, including South Korean carrier Air Seoul, German Lufthansa and Cathay Pacific Airways, have rescheduled their flights to China.

Meanwhile, Apple has decided to shut down all of its mainland stores because of the outbreak.

FURTHER READING: Facebook and other major companies restrict business trips to China

FURTHER READING: China says factory activity grew in December

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