China’s manufacturing sector shrank for a seventh month in October, signaling continued weakness in the world’s second-largest economy. The persistent slowdown has intensified calls for more government stimulus to boost domestic demand, as exporters face tough global competition and price wars abroad.
According to the National Bureau of Statistics, the official purchasing managers’ index (PMI) fell to 49.0 in October from 49.8 in September, marking a six-month low. The reading stayed below the 50-point threshold that separates expansion from contraction, missing the Reuters poll forecast of 49.6.
Meanwhile, the non-manufacturing PMI, which includes services and construction, inched up slightly to 50.1 from 50.0, showing marginal improvement in the broader economy.
Analysts say the weak PMI reflects slowing economic momentum since midyear, largely due to the ongoing property sector crisis and subdued consumer confidence. “The fiscal stance has not changed enough to offset downward pressure,” said Zhiwei Zhang, Chief Economist at Pinpoint Asset Management.
Manufacturers continue to struggle years after the COVID-19 pandemic and the trade war with the United States. Many exporters are now selling goods at reduced margins or even losses in markets across Europe, Latin America, and Africa.
Despite official data showing modest growth in industrial output and profits in September, analysts believe those gains were driven mostly by large state-owned enterprises rather than private firms.
Economists also pointed to the need for further stimulus in the fourth quarter, including policy-driven investments and government bond issuance. “The drop in the PMI is surprising given the expected boost from fiscal tools,” said Xu Tianchen of the Economist Intelligence Unit.
China’s economy grew 4.8% in the third quarter, the slowest pace in a year. Although the country remains on track to meet its 5% annual target, doubts persist about Beijing’s strategy to balance growth and consumption amid global trade tensions.
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