An Encouraging Upturn.docVIP

An Encouraging Upturn 　　A slew of positive economic indicator results in March suggested China’s economic stimulus may be having its desired impact. The manufacturing activity rebounded in March for the first time in nine months， industrial companies’ profits grew at their fastest rate in more than 18 months， and the service sector also saw healthy growth. 　　The central bank―the People’s Bank of China （PBOC）―cut commercial banks’reserve requirement ratio （RRR） by 50 basis points on March 1 to boost lending. The ratio dictates how much money banks must hold on to. The move will help push forward the country’s supply-side structural reform， according to a PBOC press release. 　　It was the latest in a series of moves to cushion the country’s economic growth slowdown. China recorded an annual growth rate of 6.9 percent last year， its slowest in 25 years. But the most recent indicator releases are an optimistic sign. 　　The manufacturing purchasing managers’ index （PMI） rose to 50.2 in March， up from 49 in February， according to data released by the National Bureau of Statistics. A reading higher than 50 indicates growth， while anything below represents a contraction. The PMI is one of the leading indicators economists look at to gauge if an economy is going into a recession or is expanding. The non-manufacturing PMI， which illustrates broader economic conditions， also reported a month-on-month growth of 1.1 points to 53.8. 　　The manufacturing PMI’s growth was unexpected， as many economists predicted a continued slowdown. A Bloomberg News survey of economists predicted a reading of 49.4. Seasonal volatility could also have contributed to the rebound in manufacturing activity with China’s Lunar New Year holiday falling in the middle of February. Factories began operating again shortly after the end of the holiday. 　　A separate private survey from Beijingbased Caixin Media and London-based Markit Economics， which focused on smaller，private companies， showed a manuf