Dividends and China factory activity cools in April, struggles to rebound

Every country in the world likes some sort of growth in the sector which provides the greatest economic activity for the country. For a number of countries around the world, tourism is a large generator of economic activity. If you ask people you know where are they going for holidays? you might be able to gauge how the global tourist economy is doing. During the past 30 years, China became the manufacturing center for the developed world.

In an article by Ellen Zhang and Ryan Woo of Reuters, the official manufacturing Purchasing Managers’ Index (PMI) declined to 49.2 from 51.9 in March, according to data from the National Bureau of Statistics (NBS). The 50 point on the index marks either expansion or contraction on a monthly basis.

The manufacturing sector in China employs about 18% of the workforce and China is the world’s second largest economy.

To boost trade and employment, the Chinese cabinet unveiled plans including supporting auto exports, facilitating visas for overseas businesspeople and providing subsidies to firms that hire college graduates.

Linking to dividend paying stocks, governments of all stripes try to encourage economic activity. If you own a profitable company they often benefit from the government’s push to help the economy, whether directly or indirectly for most subsidies are wide reaching. If the companies that you invest in does not receive government help, you should look for alternative investments for they are giving up free funds for doing what they normal would do.

There are more questions than answers, till the next time – to raising questions.


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