China November PMI eases to eight-month low

Growth in the mainland's manufacturing sector slowed last month, suggesting the world's second-largest economy is still losing momentum and adding pressure on the authorities to ramp up stimulus measures after unexpectedly cutting interest rates last month.

After saying for months that the nation does not need any big economic stimulus, the People's Bank of China surprised financial markets by lowering rates on November 21 to shore up growth. Analysts see more moves in coming months if the economy continues to stumble.

"The PBOC's rate cut appears to have failed to improve sentiment, and we see little improvement in activity indicators in November," ANZ said in a research note. "In order to maintain growth for the whole year at around 7.5 per cent (the official target), we believe that Chinese authorities will intensify easing efforts in December to accelerate growth momentum."

The official purchasing managers' index eased to an eight-month low of 50.3 last month, the National Bureau of Statistics said yesterday, still indicating a modest expansion in activity but below forecasts for 50.6 and October's 50.8.

The official PMI survey, which is biased towards large, state-owned factories, showed demand for Chinese goods was stronger domestically than abroad. New export orders fell.

A similar private survey showed growth at factories stalled last month. The final HSBC/Markit China manufacturing purchasing managers' index edged down to 50, a six-month low and right on the level that separates growth from contraction.