In November, China faced economic challenges as its factory activity contracted for a second consecutive month. The official manufacturing purchasing managers’ index (PMI) fell unexpectedly to 49.4, slightly worse than the forecasted 49.7, indicating a need for robust policy support.
Similarly, the non-manufacturing PMI weakened to 50.2, the lowest since December 2022. Over 60% of manufacturing companies reported insufficient market demand, hindering the industry’s recovery, according to Zhao Qinghe, a senior statistician at the National Bureau of Statistics.
Despite this, there are positive signs in the sub-indexes for manufacturing PMI. High-tech and equipment manufacturing recorded expansions, showcasing potential growth areas. Moreover, business confidence is improving, with the expectation index for production and operating activities in manufacturing standing at 55.8.
However, the non-manufacturing sectors face challenges, with weaknesses in service industries outweighing strengths in construction. Industries like real estate, leasing, and business services reported a business activity index below 50, pointing to further contraction.
China’s economic data, although stronger than expected in the third quarter, reflects the fragility of its vast economy. The government’s efforts to deleverage the real estate sector have created uneven economic growth.
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Conclusion:
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