The lean patch continues for the Chinese economy.
China’s manufacturing sector contracted faster than expected in May due to weakening demand. Latest government data shows that the manufacturing Purchasing Managers’ Index or PMI fell to 48.8 in May from 49.2 in April.
An index below 50 shows contraction in the sector, which clearly indicates that recovery in the world’s second largest economy is losing steam after an uptick in the first three months of 2023.
The weak manufacturing data for May is all set to add more pressure on policymakers to double down on economic recovery.
The data comes while China hopes to get a much-needed boost from Elon Musk, who is on an unannounced trip to China, his first since the pandemic began in early 2020.
The Chinese foreign ministry on Tuesday said that Musk’s Tesla is likely to expand its business in the country.
China is a huge market for the Electric Vehicle maker Tesla. The world’s second largest economy is the company’s second-largest market after the United States.
The company also runs its biggest production hub in Shanghai, which began operations in late 2019.
This makes China critical in Musk’s plan to dominate the global EV market. Hence, it must come as no surprise that Chinese media reports suggest that Musk wants better economic ties between the US And China.
“The interests of the united states and China are intertwined, like conjoined twins, inseparable from each other,” he is reported to have said in Beijing.
However, China’s manufacturing might is now being challenged by India. The country is shoring up its manufacturing capacity as part of its ‘Make in India’ initiative.
A recent survey of over 100 CEOs showed that India is increasingly being favoured over China as a top destinations by multinational companies.
Even Tesla seems to be interested in manufacturing in India.
Recent reports have suggested that the EV maker is likely to set up a factory in India, as part of a plan to diversify its supply chain.
Notably, Musk has criticised what he said were India’s high import taxes. On the other hand, India is averse to the idea of letting Tesla sell electric vehicles made in China.
For all the latest business News Click Here
