In a surprising turnaround, China’s factory activity expanded for the first time in six months – jumping to 50. 1 in October. This is a promising sign after months of contraction, with September clocking in at 49. 8. Economists had expected a slight improvement, predicting 49. 9. But the actual result was a pleasant surprise, crossing the crucial 50-point mark that separates growth from decline for the first time since April.

Why the sudden change? Some experts believe that the government's recent adjustments to monetary and fiscal policies are starting to have an impact. Zhiwei Zhang, the president and chief economist at Pinpoint Asset Management, explains this could lead to a moderate improvement in economic momentum during the fourth quarter.

Looking at the details, production picked up speed to 52, and new orders rose to 50. However, raw materials inventory and employment are still in contraction territory, resting at 48. 2 and 48. 4 respectively, showing some areas still need attention.

China’s parliament standing committee is set to meet next week, with many expecting announcements on fiscal stimulus plans once their November 8th session concludes.

China’s Factories Power Up: A Surprise Turnaround

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