Chinese economy shows further signs of slowing down ahead of Trump-Xi showdown
- ‘Economic winter has come’, says one analyst after November’s figures show further signs of cooling activity
- PMI suggests manufacturing sector was on the brink of contracting
On the eve of the high-stakes meeting between US President Donald Trump and Chinese President Xi Jinping, new data showed that the Chinese economy slowed further in November, leaving the manufacturing sector on the brink of contraction.
The official composite Purchasing Managers’ Index (PMI), which measures sentiment among Chinese manufacturing and service sector firms, fell to 52.8 in November from 53.1 in October, the National Bureau of Statistics said. The November level was the lowest since the composite series began in January 2017.
Manufacturing growth came to a halt in November, with the index falling to 50.0 from 50.2 in October. The November index was exactly at the watershed point between expansion and contraction in the sector and was the lowest since it came in at 49.9 in July 2016. The decline was unexpected. The median forecast in a Bloomberg survey had predicted an unchanged reading of 50.2.
Yu Fenghui, an adjunct professor of Huazhong University of Science and Technology, questioned whether the situation in the Chinese manufacturing sector might be worse than the data showed.
“I’m just wondering if the result of November PMI was rounded up to the 50 mark,” he wrote in a blog post. “We cannot deny that economic winter has already come, the data are here.”
Activity among non-manufacturing firms, mostly service sector companies, also slowed, with the index falling to 53.4 from 53.9 the month before. The November index was the lowest since 53.1 in May 2016, and was also lower than expected, with Bloomberg’s survey forecasting a small drop to 53.8.