Thursday, April 25, 2019
Home Business China's manufacturing scale is approaching the decline in October

China's manufacturing scale is approaching the decline in October

China's manufacturing output slowed in October according to official figures due to the increasing slowdown in the Chinese economy.

The manufacturing PMI released by the Chinese Bureau of Statistics slipped from 50.8 in the previous month to 50.2, approaching the 50-point line that separates growth from contraction.

The October result was also below a median forecast by economists surveyed by Reuters.

The value for the services sector showed growth of 53.9 compared to 54.9 in the previous month. Taken together, this led to a composite PMI of 53.1, also down one percentage point from September, but still in the expansionary range.

The results come when Chinese politicians are introducing a series of measures to strengthen the financial system in the face of slowing economy, rising debt and trade tensions with the US.

This week, securities regulators have been trying to boost stock market sentiment with a promise to increase liquidity. In early October, President Xi Jinping's top economic adviser, Vice Premier Liu He, as well as the heads of the Chinese Central Bank and the Banking Supervisor, had strengthened confidence in Chinese markets.

Economist economist Julian Evans-Pritchard noted that the October purchasing managers' index was the worst in two years, mainly driven by weaker domestic demand, even though the export sub-index declined.

"We believe further easing of fiscal and monetary policy will be needed in the coming months to help stabilize growth," added Evans-Pritchard.

Nomura analysts now expect a "slowdown in growth" next year.

"Beijing's policy focus so far has been on curbing credit risk, and growth is likely to slow to a worrying pace in the spring of 2019, with Beijing possibly having to sharply increase its easing / stimulation measures at that time," the bank's analysts said.

ANZ economist Raymond Yeung said the data confirmed "a broad decline in economic activity."

"The economic conditions faced by the Chinese private sector are far worse than we would expect from our point of view. In addition to an expected reduction in the reserve requirement ratio (RRR) for next January, we expect future supportive policies to be measured. The government's priority is to avoid a financial crisis, "Mr. Yeung said.


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