China’s factory activity shrank for an eighth consecutive month last month, official data showed yesterday, suggesting the world’s second-largest economy remains subdued despite a trade truce with the US.
The manufacturing purchasing managers’ index (PMI) — a key measure of industrial health — was 49.2 last month, according to the Chinese National Bureau of Statistics (NBS).
That marked an improvement from 49 recorded in October, but remained below the 50 mark that separates expansion from contraction.
Photo: AP
The reading missed a median forecast of 49.4 from a Bloomberg survey of economists.
The figure comes after Chinese President Xi Jinping (習近平) and US President Donald Trump met in South Korea in October and agreed on a temporary truce in their bruising trade war.
Meanwhile, the nonmanufacturing PMI, which measures activity in sectors including services and construction, was 49.5 last month, marking the first contraction in nearly three years.
That was partly attributable to the “fading holiday effect” after the end of China’s “Golden Week” National Day holiday in October, NBS statistician Huo Lihui (霍麗慧) said in a statement.
Weakness in the real-estate and residential services sectors also helped drag the figure down 0.6 percentage points from October.
While Chinese authorities previously rolled out measures such as trade-in subsidies for home appliances and electric vehicles, some of them are set to be phased out, and sales and demand are likely to drop, analysts said.
The fading boost from the consumer goods trade-in policies might be weighing on domestic demand for manufactured goods and “signals on domestic demand have been mixed,” Capital Economics economist Huang Zichun (黃子春) said last week.
Chinese officials have set a target of about 5 percent economic growth for this year. The economy expanded 4.8 percent in the July-to-September quarter.
“This year’s growth target is likely to require minimal additional support to be reached,” ING Bank NV chief Greater China economist Lynn Song (宋林) wrote in a note earlier this month.
Additional reporting by AP
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