China's manufacturing improves in July, exports strengthen

China’s manufacturing activity edged up in July and export orders strengthened despite weak U.S. and European demand, a survey showed Friday, in fresh signs the world’s second-largest economy is gradually recovering from the coronavirus pandemic.

The monthly purchasing managers’ index issued by the Chinese statistics bureau and an industry group rose to 51.1 from June’s 50.9 on a 100-point scale. Numbers above 50 show activity increasing.

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A measure of new orders improved to 51.4 from 51.7, according to the National Bureau of Statistics and the China Federation of Logistics & Purchasing. New export orders rose 5.8 points to 48.4.

The results suggest “China’s economy continues to maintain a rebound trend,” the federation said in a statement.

China, where the pandemic began in December, was the first economy to shut down to fight the virus and the first to try to revive business after the ruling Communist Party declared victory over the disease in March.

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The economy grew by an unexpectedly strong 3.2 percent over a year earlier in the three months ending in June, rebounding from a 6.8 percent contraction the previous quarter.

Manufacturing is close to normal activity but retailing, restaurants and other service industries are struggling.

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Forecasters warn exports are likely to dip again later in the year once demand for masks, surgical gloves and other medical supplies eases. That will increase the burden on Chinese consumers and government stimulus spending to keep a recovery on track.