China factory activity contracts in Nov for 2nd consecutive month despite stimulus measures to support economy

According to an official survey of Chinese manufacturers, factory activity contracted for the second consecutive month in November, signifying weak demand despite various stimulus measures to support the economy. The official manufacturing purchasing managers’ index, released on Thursday by the National Bureau of Statistics, declined to 49.4 in November, slightly lower than October’s 49.5. A reading below 50 indicates a contraction in manufacturing activity, while a figure above 50 signifies expansion on a scale up to 100. The index has experienced a decline in seven of the past eight months, with a solitary increase in September. Despite persistent weakness following the pandemic, the economy is anticipated to grow at approximately a 5% annual pace this year. China’s recovery from the COVID-19 pandemic has faltered after an initial burst of growth earlier in the year faded more quickly than expected. Despite prolonged weakness in consumer spending and exports, the economy is expected to grow at about a 5% annual pace this year. Capital Economics’ Sheana Yue and Julian Evans-Pritchard wrote in a note that the latest surveys may be “overstating the extent of slowdown due to sentiment effects.” “That turned out to be the case in October, with the hard data not quite as weak as the PMIs had suggested,” they wrote. In recent months, the government has raised spending on the construction of ports and other infrastructure, cut interest rates and eased curbs on home-buying. China’s policy advisors have called for still stronger stimulus measures to revive the economy. With inputs from AP.