“China’s industrial sector showed a slight improvement in November, but remained in recession, continuing a record-breaking streak amid deepening economic woes in the country.”, — write: www.pravda.com.ua
Source: Bloomberg
Details: The official index of business activity (PMI) in China’s manufacturing industry was 49.2 points. The indicator remains below the 50 mark, which separates growth from recession, for the eighth month in a row. This is the longest negative streak in the entire history of observations.
Advertising:
Experts polled by Bloomberg had predicted a slightly higher figure at 49.4 points, but the reality turned out to be worse than expected.
The index of business activity in construction and services also fell to 49.5 after rising to 50.1 in October, according to China’s National Bureau of Statistics. This is the first reduction in this sector in almost three years. The main factor behind the decline was the weakness of the real estate and housing services sectors.
These data provide the first insight into the state of the world’s second largest economy in November after a period of global trade turbulence and an unprecedented decline in investment. In the current quarter, industrial production showed the slowest growth since the start of the year, and exports unexpectedly fell as weak global demand failed to offset a drop in shipments to the US.
Literally: “At the same time, the tension in relations with Washington has eased somewhat. This happened thanks to the temporary truce reached in October after the meeting of Presidents Donald Trump and Xi Jinping in South Korea. However, key details of the agreement, in particular the issue of the supply of rare metals from China, are still at the negotiation stage, which indicates the shakiness of the agreement.
Details: In addition to geopolitical risks, the outlook for Chinese manufacturers is weighed down by weak domestic demand. In October, the growth of retail sales slowed down for five months in a row. This is the longest streak of decline since the lockdown due to the Covid-19 pandemic more than four years ago, according to Bloomberg.
Despite the economic slowdown, Chinese government officials are in no rush to introduce new large-scale stimulus measures. An annual GDP growth target of around 5% still looks achievable for Beijing.
In the perspective of the next five years, Beijing plans to maintain the priority of technology and production. This happens even despite the declaration of intentions to “significantly” increase the share of domestic consumption in the economy.
Analysts predict a further slowdown of China’s economy. The current quarter is expected to be the weakest since the end of 2022, when the country was emerging from strict quarantine restrictions.