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BEIJING: China’s economic activity swung back to growth in January, official data showed on Tuesday, after a wave of COVID-19 infection passed through the country faster than expected following abandonment of pandemic controls.

The official purchasing managers’ index (PMI), which measures manufacturing activity, rose to 50.1 from 47.0 in December, the National Bureau of Statistics (NBS) said on Tuesday. Economists in a Reuters poll had predicted the PMI to come in at 48.0. The 50-point mark separates contraction from growth.

Non-manufacturing activity, which includes provision of services, the construction industry and catering, for example, surged to 54.4, up from 41.6 in December.

Both indexes had previously shown the economy to be contracting since September.

The data is one of the first NBS indicators of how the economy has managed since the end of China’s zero-COVID regime and during a week-long Lunar New Year that ended on Friday.

Eighty percent of people in China had already been infected with COVID-19 before the festivities began, according to China’s chief epidemiologist, with the wave of disease passing through the population faster than economists had expected and bringing fewer disruptions, too.

Lunar New Year consumption was 12.2% higher than in last year’s holiday period, while holiday trips inside China surged 74%, as people headed out to celebrate for the first time in three years without COVID-19 restrictions. China’s cabinet pledged on Saturday it would promote a recovery in consumption as the major driver of the economy and boost importers. Chinese manufacturers are struggling with cooling external demand.

Chinese exports last month were 9.9% lower than a year earlier.

Factories tried to retain workers over the festive period to make up ground lost to the COVID disruptions of last year. Kevin Whyte, who sources homewares in China for a major Britain-based retailer, told Reuters that his partner factory in China had offered bonuses to workers to shorten their vacations over the New Year period.

The official composite PMI, which combines manufacturing and services, rose to 52.9 from 42.6 in December.

The private sector Caixin manufacturing PMI, which centres more on small firms and coastal regions, will be published on Feb. 1. Analysts polled by Reuters expect a headline reading of 49.5, up from 49.0 in December.

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