China’s manufacturing shrank for a third month last month as export demand fell, suggesting an economic slump is worsening despite government efforts to shield the country from global turmoil, data reported yesterday showed.
A key indicator, the Purchasing Managers Index, edged up from November’s all-time low but stood at 41.2, below the 50 level that shows activity is shrinking, the government-sanctioned China Federation of Logistics and Purchasing (中國物流與採購聯合會) said.
Manufacturing is about 40 percent of China’s economic output, and a drop in demand for its exports has triggered thousands of factory closures. That has prompted protests by laid-off workers and the Chinese Communist Party worries more job losses could fuel unrest.
Beijing launched a spending package worth billions of dollars in November to revive growth and is promising companies loans and other aid. But the stimulus is in its early stages and analysts say it could take several months to see results.
The index of new export orders stood at 30.7, showing a severe contraction, the logistics group said. Exports fell in November for the first time in seven years and analysts expect more weakness last month when monthly figures are reported this month.
The index is based on a survey of 700 manufacturers across China.