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For the fifth consecutive month, the manufacturing sector of China have reportedly expanded yet again as reports and more data showed that the economy of the country has started down a stabilization path.

Although it has slowed a little bit last December, the growth of the economy is still at a steady rate after the Chinese government exerted more efforts in boosting their economy. This includes cutting asset prices which are highly believed to be the main contributing factor in the recent sluggish pace of the country’s economy.

Just last month, the country’s leaders hinted of policies this year that would address the growing asset or housing prices.

Reports show that the manufacturing sector of China rose up by as much as 6.8% in the third quarter of 2016. The data then provided a brighter outlook for the country’s economy.

China’s official manufacturing purchasing managers index dropped by around 51.4 last month compared to November’s 51.7 showing that the growth of China’s economy is still going up at a slower momentum but still under an expansion.

The weaker reading, according to experts, points out to the easy money policy where Beijing has depended on pretty much the majority of the year in some of their efforts in boosting the economy. In the middle of concerns in the ever increasing corporate debt amounts which has reached almost 145% of the gross domestic product, the country’s policymakers are confident that the country’s economy would hit their mark of around 6.5% to 7% annual growth rate.

Manufacturing Sector Performance

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Although the Chinese economy have helped the manufacturing sector through bigger budgets placed on public infrastructure projects, exports also supported the growth of the sector which inched higher by 0.1% back in November from October’s decline of 7.3%.

The improving health of the country’s economy was also accounted for by the optimistic outlook for a huge chunk of the sub-indices of the manufacturing sector of China’s economy while a renewed demand was received by manufacturers from the country as early as last month.

The demand led to the growth of the country's economy to a 71-month high although it is also facing some risks brought about by Trump’s presidency which hopes to target the country’s trade industry through higher taxes and fees.

Despite the overall positive outlook for the manufacturing growth of China, the central part of the sector have struggled recently due to a decreasing amount of demand for products from China and an excessive industrial capacity from the fast-paced growth of the country’s infrastructure.

Aside from the growth brought about by the manufacturing groups, sectors such as food and beverages, tobacco, pharmaceutical, automobile, and other consumer goods also recorded PMI higher than 53 showing an ongoing growth in the aforementioned sectors while small businesses and companies showed a slower growth with the PMI ranging from around 47.2 to 47.4.

Yuan Outlook For 2017

Following the country's move to make certain changes to their currency basket for Yuan to be less affected by the changes led by the US Dollar, the Chinese central bank is also said to be setting a higher fixing for Yuan daily which will make it less susceptible to the greenback.

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