Analysts and Chinese politicians say the country needs to rebalance away from reliance on exports and fixed asset investment towards a consumer-driven economy.
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ANZ Bank economists Liu-Li Gang and Louis Lam said the official manufacturing index was consistent with other data released last month that showed factory output weakening and reinforce the need for Beijing to roll out further stimulus measures.
New (KOSDAQ: 160550.KQ – news) home prices in 100 major cities in China rose almost three percent year-on-year in November, the fourth straight month of increase, according to a report by the China Index Academy. “Signs of the sector slowing have been building up, as growth of both new orders and output has eased in each of the past four months”.
The statistics bureau blamed the disappointing figure on weak overseas and domestic demand, falling commodity prices and manufacturers’ reluctance to restock.
The PMI for the non-manufacturing sector rose to 53.6 from 53.1 in October.
It’s further evidence of what leading economist Zhu Haibin, chief China economist at JPMorgan, recently described as China’s “two-track economy”. In China, South Africa’s biggest trading partner, the official manufacturing PMI slipped to its lowest level since August 2012 to 49.6 points, down from 49.8 points in October.
Under the PMI, the manufacturing sector is divided into eight broad categories of basic metals, chemicals and plastics, electrical and optical, food and drink, mechanical engineering, textiles and clothing, timber and paper and transport.
PMI will remain negative in November.
Deflationary pressures are as strong as ever, with the main raw materials purchase price index slipping 3.3 points to 41.1.
The release said the health of India’s manufacturing economy had improved for the 25th successive month in November, although to the least extent in this sequence. Growth in the latest quarter fell to a six-year low of 6.9 per cent. Activities in the service sector revealed some strength but the manufacturing has not shown any improvement. In an effort to bolster growth, the People’s Bank of China has cut benchmark interest rates and banks’ reserve requirement ratio five times this year.
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“This suggests that the sector is unlikely to sustain its recent rebound and despite the absence of load-shedding‚ growth could be much weaker in the final quarter of the year‚” Barclays said.
