FX Graph

Trade disputes push China’s manufacturing further into contraction

Trade disputes push China manufacturing further into contraction

China's manufacturing sector outlook index fell to its lowest level since February, underscoring the uncertainty faced by companies suffering from weak domestic demand and uncertainties hovering around trade deal between U.S and China.

According to data released by the national bureau of statistics on Thursday, the manufacturing PMI fell to 49.3 in October from 49.8 in September, worse than the estimates of 49.8. That’s the sixth straight month of contraction.

In the same context, a sub-index measuring new export orders began to fall once again, as it slipped to 47.0, and the sub-measure of production was at its lowest level since February.


The non-manufacturing measure witnessed a slowdown in growth to record 52.8, lower than both forecasts and the previous readings of 53.7.

It seems that China manufacturing sector’s return to expansion zones will depend on the government stimulus efforts and confidence-building from a partial trade deal with the United States in the upcoming month.

It is worth mentioning that the Chinese economy grew in the third quarter by 6% from last year, the slowest pace since the early 1990s.

As of 09:18 GMT, the onshore yuan was 0.16 percent up at 7.0431 per dollar after gaining 0.14 percent the previous session, following the Fed’s decision to cut interest rates by 25 basis points.

Share Article