China, the world’s second largest economy, has been going through various economic crises in the last few years. Data from the real estate sector to the manufacturing sector are not coming in the way they are needed. The special thing is that the figures of factory activity for the month of November have not been as expected. The special thing is that China has been waiting for good news on this front for 8 months. But no success has been achieved. Let us also tell you what kind of story China’s factory activity figures are telling.
PMI continuously low for 8 months
China’s factory activity declined for the eighth consecutive month in November. This information has been given in an official survey. Although an agreement has been reached between America and China on the trade front, China’s challenges remain. China’s National Bureau of Statistics said the official manufacturing PMI rose slightly to 49.2 in November, from 49 in October. PMI being below 50 means contraction in activities.
This decline in PMI activities is in accordance with analysts’ estimates. China’s exports may gain competitiveness in the US market after the US tariff cut earlier this month. But it is too early to say whether exports have picked up pace again after the trade agreement or not. US President Donald Trump had said that America will cut duties on Chinese products from October 30. This brings some hope for China’s exports and manufacturing.
Real estate recession continues
The prolonged slowdown in China’s real estate market and falling house prices are still weakening consumer confidence, and real estate investment has also declined. Domestically, intense price competition in many sectors including the auto industry has also put pressure on many businesses. Economists say that more government policy support is needed to boost the economy.
But Lin Song, chief economist for Greater China at ING Bank, wrote in a note earlier this month that policymakers appear to be delaying providing further policy support. Although Chinese authorities have previously introduced measures such as trade-in subsidies for home appliances and electric vehicles, analysts say some of these subsidies are gradually set to expire, and sales and demand are likely to decline.
What is the target of the economy?
Zichuan Huang, China economist at Capital Economics, said last week that the slow stimulus from consumer goods trade entry policies could weigh on domestic demand for manufactured products, and domestic demand signals have been mixed. Chinese officials have set a target of about 5 percent economic growth for the whole of 2025. The economy grew by 4.8 percent in the July-September quarter. Song wrote that minimal additional assistance would be required to achieve this year’s development target.