China’s factory activity slumped for the longest streak in more than nine years, prompting fresh calls for greater policy support even as the country reached a trade truce with the US.
The official manufacturing purchasing managers’ index fell more than expected to 49 last month, suggesting activity dropped the most in six months just before a leaders’ meeting stabilized ties this week.
New orders shrank the most since 2023 as demand took a hit from trade barriers and weak sentiment at home.
Photo : AFP
“It is a discouraging start to the fourth quarter,” said Lynn Song (宋林), chief Greater China economist at ING Bank NV.
The data released yesterday is “a reminder that policy support is still needed” to shore up areas of weakness in the economy, Song said.
Huo Lihui, a statistician at the National Bureau of Statistics, blamed the sluggish activity on fewer working days last month because of national holidays and “increased complexity in the global environment.”
Photo: Reuters
Tensions between the world’s largest economies escalated over export controls, with US President Donald Trump threatening additional 100 percent tariff on imports from China.
The output subindex fell below the 50 mark that separates contraction from growth for the first time since April, when Trump unleashed his “Liberation Day” tariffs. The new export order subindex also recorded its worst reading since then.
Given the broad slowdown in factory activity, manufacturers could find relief from the deal reached between Trump and Chinese President Xi Jinping (習近平) that reduced tariffs on made-in-China products. Weak domestic demand and uncertainties in US-China relations continue to cast a shadow over the outlook.
The nonmanufacturing measure in construction and services inched up to 50.1. Unlike factories, the services sector likely benefited from the long National Day holidays.
Some Chinese exporters who spoke with Bloomberg News expressed optimism the deal would boost orders for their goods, although that prospect no longer excites them as it once did.
Many said they have learned their lessons from Trump’s trade brinkmanship and realize they cannot rely solely on access to the world’s biggest consumer market.
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