In the face of lingering economic challenges, China’s recent manufacturing Purchasing Managers’ Index (PMI) for November slipped to 49.4, marking the second consecutive month below the critical 50 mark that separates expansion from contraction.
The data, released by the National Bureau of Statistics, reveals a concerning contraction in factory activity, reflecting dwindling domestic and foreign orders. Simultaneously, the services sector saw a dip to 49.3, indicating a contraction for the first time this year. These figures underscore the need for additional government intervention to navigate a potential year-end slowdown, especially given the broader global economic headwinds.
The real estate sector’s prolonged downturn continues to impact consumer confidence, posing challenges for household spending. While previous measures, including interest rate cuts and efforts to revitalize the property market, have stabilized growth, economists suggest a more targeted approach is needed, focusing on the housing market.
As China grapples with both short-term economic concerns and long-term challenges such as trade tensions and an aging population, a delicate balancing act is underway to transition towards a consumption-driven economy. Policymakers are treading cautiously, cognizant of the need for sustained support to ensure a robust and enduring recovery, acknowledging that the journey toward economic transformation is both lengthy and challenging.
