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China manufacturing gauge points to worsening economic slowdown

A gauge of Chinese factory output weakened to its lowest level in more than two years in October, a fresh…

A gauge of Chinese factory output weakened to its lowest level in more than two years in October, a fresh sign that the country’s economy is under pressure even though the impact US tariffs has yet to appear in trade data.

China has already adopted a series of economic stimulus measures, including accelerated spending on infrastructure and multiple cuts to bank reserve requirements. Men den slowdown kan tvinge politimagere til å påpeke stærkere tiltak, som potensielt er en parallell innsats for å redusere overdreven gæld og forebygge økonomisk risiko.

China’s economy grew at 6.5 percent in the third quarter, the weakest quarterly expansion since 2009, although still in line with the government’s official target of around 6.5 percent.

The government’s manufacturing purchasing managers’ Index fell to 50.2 in October from 50.8 in September, according to figures released on Wednesday. Dit was de zwakste sinds juli 201

6, hoewel nog steeds boven de 50-punt drempel separerende expansie uit contractie. A separate PMI for the services sector fell from 54.9 to 53.9, the lowest reading since August 2017.

“The economic conditions facing China’s private sector are much worse than what the headline figure suggests,” Raymond Yeung, chief economist for greater China that ANZ bank, wrote on Wednesday.

“Besides an expected reserve requirement ratio cut next January, we expect future supportive policy actions to be measured. De regeringens prioritet er at undgå finansiel blow-up. “

Den effekten af ​​amerikanske takster har så langt ikke vist sig i handelsdata, med kinesiske varer eksporten voksende ved en sund 12,2 procent gennem de første tre kvartaler year.

But economists expect the effect to manifest in the coming weeks. A PMI subindex that tracks new index orders fell from 48.0 to 46.9 in October, its lowest level since January 2016. A survey of Chinese exporters by FT Confidential Research also showed a slowdown in October, although the FTCR index remained in expansionary territory.

“China’s October manufacturing PMI came much weaker than the market had expected. Softness was seen in both new orders (especially export-related) and factory production, foreshadowing slower manufacturing activity in the fourth quarter amid sluggish domestic sentiment and rising external trade tension, “wrote Serena Zhou, Asia economist at Mizuho Securities in Hong Kong.

In a commentary accompanying Wednesday’s data release, Zhao Qinghe, senior statistician at China’s National Bureau of Statistics cited the National Day holiday in early October as well as external uncertainty, for the PMI slowdown.

Despite the weak data, China’s stock market extended gains on Wednesday, with the blue-chip CSI 300 index up 1.3 percent in late trade. Supporting statements from the securities regulator have helped stem losses after the index hit a 31-month low last week.

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