Beijing, industrial production falls for a fourth consecutive month
Beijing (AsiaNews / Agencies) - Industrial activity in China has contracted for the fourth consecutive month. However, according to unofficial numbers and forecasts, this decline has brought with it some signs of stabilization for the sector, vital for the country's economy.
The PMI index - scale that determines the purchasing power relative to industrial production - stood at 49.6: up from 49.2 the previous month but still below 50 points, the threshold that separates contraction from expansion.
On the same scale, new orders are at a comforting 50.3: exports however, collapsed in May, but at a slower pace. But the sector lost jobs at the fastest pace of the last six years, which certainly worries the central government. To stem the losses, large industries have accepted lower prices for products.
Despite a steady stream of public funds, the so-called "stimulus" provided by the Central People’s Bank of China economic growth has been unable to exceed the threshold of 7 percentage points. The decline in domestic demand - caused in part by the reduction of purchasing power - gave the final blow to the industrial production which was already tried by the international economic crisis.
According to some analysts, the most serious problem is the economic mechanism itself. A considerable part of the funds allocated by the government, in fact, was absorbed by the market and did not reach the so-called "real economy". In this way it weakened the power of incentives provided by the capital at zero interest, and this has thrown the country into a seemingly never ending spiral.
To try to curb what now seems like an unstoppable trend, the government has tasked the State Council the task to launch a ten-year recovery plan. This plan to "bet everything" on new technology, is being termed "the key to the economic revival of China".