19 September 2019
China's services sector is growing at the slowest pace since 2008. Photo:
China's services sector is growing at the slowest pace since 2008. Photo:

China numbers show economy still wobbly

Activity in China’s manufacturing sector unexpectedly contracted in October for a third straight month, an official survey showed Sunday.

The data fueled fears the economy may still be losing momentum in the fourth quarter despite a raft of stimulus measures, Reuters reported.

Adding to those concerns, China’s services sector, which has been one of the few bright spots in the economy, also showed signs of cooling last month, expanding at its slowest pace in nearly seven years.

As the first major indicators of business conditions in China released each month, the purchasing managers’ indexes reinforced the view that the economy remains in the midst of a gradual slowdown that will require Beijing to roll out more support in coming months.

“While the [manufacturing] PMI has stabilized, it is too early to confirm a bottoming out,” economists at ANZ Bank said in a note.

“As deflation risks intensify, a further RRR cut before end of this year is still possible,” ANZ said, referring to the reserve requirement ratio for banks.

The manufacturing PMI was 49.8 in October, the same pace as in previous month and lagging market expectations of 50, National Bureau of Statistics figures showed.

A reading below 50 points suggests an contraction.

New export orders contracted for a 13th straight month, although the sub-index for new orders — a proxy for domestic and foreign demand — edged up marginally to 50.3, compared with September’s 50.2.

As regards the services sector, the growth of which has helped offset persistent weakness in manufacturing, the official non-manufacturing PMI fell to 53.1 in October from September’s 53.4.

Though still a solid pace of expansion, it was the lowest reading since late 2008, during the global financial crisis, a similar survey showed.

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