China factory activity slows in October amid trade war woes and weakening of yuan

Beijing: Chinese factory activity slowed in October, official data showed on Wednesday, adding to a growing list of bad news for the Asian giant as it struggles to maintain economic momentum in the face of American tariffs and a weakening yuan. The Purchasing Managers’ Index (PMI), a key gauge of factory conditions, came in at 50.2 for the month, down from 50.8 in September, the National Bureau of Statistics said. The figure was below the 50.6 reading tipped in a Bloomberg News survey of economists. [caption id=“attachment_3148480” align=“alignleft” width=“380”] Chinese yuan. AFP[/caption] Although the numbers indicated a slowdown, they remained above the 50-point mark that separates expansion from contraction. The figures are the latest sign that the world’s second-largest economy is losing momentum as it faces challenges at both home and abroad – from a trade war with the US to a massive debt buildup. Growth dipped to 6.5 percent in the third quarter, down from a high of 6.8 this year. The number was in line with Beijing’s annual target. But further downward pressure could threaten the country’s key political goals of eliminating poverty by 2020 and building a “moderately prosperous society”. American tariffs on virtually all Chinese imports have sapped confidence in Beijing’s ability to maintain current growth levels. Analysts say that the country’s overleveraged companies and local governments are likely to put a further drag on expansion. On Tuesday, China lowered its yuan-fixing rate to its lowest level in a decade. A weaker yuan makes Chinese exports less expensive overseas, ameliorating some of the higher costs brought by the tariffs.