China on post Covid-19 economic recovery course

Demonizing China is easy, keeping pace with it is difficult, if not impossible.

China’s manufacturing activity has expanded at the fastest pace in nearly a decade as a recovery in supply and demand continued to pick up speed in the post-pandemic period, a Caixin-sponsored survey has indicated.

Unbelievable, if one were to factor in the adverse impact of Covid which originated in China.

This comes at a time when the Communist government headed by President Xi Jinping has unveiled the country’s Five Year Plan and a 15-year-vision to take China ahead of the US.

The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), which gives an independent snapshot of the country’s manufacturing sector, rose to 53.6 in October from 53 the previous month.

The October reading was the highest since January 2011 and marked the sixth straight month of expansion. Readings greater than 50 indicate expansion.

“Recovery was the word in the current macro economy, with the domestic epidemic under control,” said Wang Zhe, senior economist at Caixin.

This boost coincides with special efforts by China to woo foreign investors, many of whom have been relocating to other Asian countries like Vietnam and Bangladesh.

Last week, China’s stock exchange regulators published rules to give foreign investors more leeway to adjust their investments in the country’s capital market as China continues expanding investment access to foreigners.

The new rules are part of guidelines released by the Shenzhen and Shanghai stock exchanges regarding the country’s two major programs offering foreign investors access to Chinese financial assets — the Qualified Foreign Institutional Investor (QFII) plan and its yuan-denominated sibling, the Renminbi Qualified Foreign Institutional Investor (RQFII) system.

Under the guidelines, exchange regulators will publish warnings when total foreign shareholding in a single domestically listed company reaches 24%, rather than at 26% as previously.

China caps overall foreign ownership in a single listed company at 30% while limiting each foreign shareholder to no more than 10% of a listed business.