China’s factory activity shrank at the sharpest pace since the COVID-19 pandemic first emerged about three years ago, after Beijing’s abrupt reversal of counter-epidemic measures last month set off a wave of COVID-19 infections across the country.
The official purchasing managers’ index (PMI) fell to 47.0 last month from 48.0 in November, the National Bureau of Statistics said on Saturday.
Economists in a Reuters poll had expected the PMI to come in at 48.0. The 50-point mark separates contraction from growth on a monthly basis.
Photo: AP
The drop was the biggest since the early days of the pandemic in February 2020.
The data offered the first official snapshot of the manufacturing sector after China removed the world’s strictest COVID-19 restrictions last month. Cumulative infections likely reached 18.6 million last month, UK-based health data firm Airfinity said.
Analysts said surging infections could cause temporary labor shortages and increased supply chain disruptions.
Weakening external demand on the back of growing global recession fears amid rising interest rates, inflation and Russia’s invasion of Ukraine could further slow China’s exports, hurting its massive manufacturing sector and hampering an economic recovery, they said.
“Most factories I know are way below where they could be this time of year for orders next year. A lot of factories I have talked to are at 50 percent, some are below 20 percent,” said Cameron Johnson, a partner at Tidal Wave Solutions, a supply chain consulting firm.
“So even though China is opening up, manufacturing is still going to slow down because the rest of the world’s economy is slowing down. Factories will have workers, but they will have no orders,” Johnson said.
The bureau said 56.3 percent of surveyed manufacturers reported that they were greatly affected by the epidemic last month, up 15.5 percentage points from the previous month, although most also said they expect the situation to gradually improve.
In 2021, inflation-adjusted GDP reached 114.92 trillion yuan (US$16.66 trillion), up 8.4 percent from 2020. GDP expanded 3 percent in the first nine months of last year, compared with China’s official full-year goal of around 5.5 percent.
The World Bank expects growth for last year of 2.7 percent.
The non-manufacturing PMI, which looks at services sector activity, fell to 41.6 from 46.7 in November, the bureau’s data showed, also marking the lowest reading since February 2020.
The official composite PMI, which combines manufacturing and services, declined to 42.6 from 47.1.
“The weeks before Chinese New Year are going to remain challenging for the service sector as people won’t want to go out and spend more than necessary for fear of catching an infection,” Capital Economics head Asia economist Mark Williams said.
“But the outlook should brighten around the time that people return from the Chinese New Year holiday — infections will have dropped back, and a large share of people will have recently had COVID and feel they have a degree of immunity,” he said.
Taiwan’s rapidly aging population is fueling a sharp increase in homes occupied solely by elderly people, a trend that is reshaping the nation’s housing market and social fabric, real-estate brokers said yesterday. About 850,000 residences were occupied by elderly people in the first quarter, including 655,000 that housed only one resident, the Ministry of the Interior said. The figures have nearly doubled from a decade earlier, Great Home Realty Co (大家房屋) said, as people aged 65 and older now make up 20.8 percent of the population. “The so-called silver tsunami represents more than just a demographic shift — it could fundamentally redefine the
Businesses across the global semiconductor supply chain are bracing themselves for disruptions from an escalating trade war, after China imposed curbs on rare earth mineral exports and the US responded with additional tariffs and restrictions on software sales to the Asian nation. China’s restrictions, the most targeted move yet to limit supplies of rare earth materials, represent the first major attempt by Beijing to exercise long-arm jurisdiction over foreign companies to target the semiconductor industry, threatening to stall the chips powering the artificial intelligence (AI) boom. They prompted US President Donald Trump on Friday to announce that he would impose an additional
China Airlines Ltd (CAL, 中華航空) said it expects peak season effects in the fourth quarter to continue to boost demand for passenger flights and cargo services, after reporting its second-highest-ever September sales on Monday. The carrier said it posted NT$15.88 billion (US$517 million) in consolidated sales last month, trailing only September last year’s NT$16.01 billion. Last month, CAL generated NT$8.77 billion from its passenger flights and NT$5.37 billion from cargo services, it said. In the first nine months of this year, the carrier posted NT$154.93 billion in cumulative sales, up 2.62 percent from a year earlier, marking the second-highest level for the January-September
Asian e-commerce giant Shein’s (希音) decision to set up shop in a historic Parisian department store has ruffled feathers in the fashion capital. Anger has been boiling since Shein announced last week that it would open its first permanent physical store next month at BHV Marais, an iconic building that has stood across from Paris City Hall since 1856. The move prompted some French brands to announce they would leave BHV Marais, but the department store had already been losing tenants over late payments. Aime cosmetics line cofounder Mathilde Lacombe, whose brand was among those that decided to leave following
RSS