China’s economic slowdown deepened in November as factory activity continued to contract for the eighth consecutive month, according to official data reported by Bloomberg. The National Bureau of Statistics said the manufacturing purchasing managers’ index (PMI) stood at 49.2, below the 50 threshold that separates expansion from contraction, narrowly missing economists’ median estimate of 49.4. Meanwhile, the non-manufacturing PMI, covering construction and services, fell to 49.5, marking its first contraction in nearly three years amid weakness in the real estate and residential services sectors.
The figures provide an early snapshot of the world’s second-largest economy after a period of global trade turbulence and sharply reduced investment. Industrial production posted its smallest gain of the year, while exports unexpectedly contracted, as declining shipments to the United States outweighed other markets. Bloomberg noted that, despite an easing of tensions with the US after a temporary truce between Presidents Donald Trump and Xi Jinping in South Korea last month, key aspects of the agreement—including Chinese shipments of rare earths—remain unresolved, underscoring the fragility of trade relations. A recent diplomatic spat with Japan has further added uncertainty, prompting China to contemplate potential countermeasures.
Domestic demand continues to weigh on the economy. Retail sales growth slowed for the fifth straight month in October, marking the longest such streak since the Covid lockdowns more than four years ago. Despite the slowdown, Chinese policymakers are not rushing additional stimulus, as the country appears on track to meet its annual growth target of around 5 percent. Since late September, the government has already injected roughly 1 trillion yuan ($141 billion) in measures including provincial bond quotas to expand investment and repay corporate arrears, as well as new funding for policy banks.
Looking ahead, Beijing has signaled its intention to prioritize technology and manufacturing while increasing the contribution of consumption to overall growth. Net exports accounted for nearly a third of China’s expansion this year. Analysts forecast that the current quarter may see the weakest growth since the final months of 2022, when the country was emerging from its Covid Zero lockdowns. Bloomberg highlighted that while the latest PMI readings show slight improvement from previous months, the continued contraction reflects underlying pressures from both global and domestic factors that are likely to shape China’s economic trajectory in the coming quarters.
