The growth of factory activity in China is not expected because experts condemn insufficient stimulus measures
A worker welds at an agricultural machinery manufacturing enterprise in the Qingzhou Economic Development Zone in Qingzhou, China, 31 August 2024.
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Growth in China’s factory activity in November missed analysts’ expectations on Tuesday, signaling that Beijing’s stimulus measures were not enough to significantly boost the country’s faltering economy.
State official index of purchasing managers for December was 50.1, the data was published by Data from the National Bureau of Statistics showed.
The reading missed Reuters expectations of 50.3. Production activity was 50.3 in November and 50.1 in October. A PMI reading above 50 indicates expanding activity, while a figure below indicates contraction.
Investors will also be watching the Caixin/S&P Global Manufacturing Purchasing Managers’ Index due for release on Thursday.
“For the Chinese economy, 2024 will be remembered as a year of confusion,” said Larry Hu, Macquarie Group’s chief China economist.
“Deflationary pressures are still present because the policy stimulus is just enough to reach the GDP target, but far from enough to restart the economy,” he added.
China’s economy has shown a sliver of recovery after a series of stimulus measures introduced from at the end of September.
However, other recent economic data from China shows that the world’s second-largest economy is still in the throes of disinflation, largely due to tepid consumer demand and a prolonged downturn in the housing market.
Consumer inflation in China fell to the lowest level in five months in November, while export and import figures of the country below expectations. In addition, the latest retail sales figures also disappointedmissing Reuters forecasts.
China’s industrial profits extended decline for fourth month in a row, down 7.3% November compared to the previous year.
last week, It was published by the Chinese Ministry of Finance it would increase fiscal support next year to help boost spending by expanding the replacement of consumer goods, increase pensions as well as health insurance subsidies for residents.
The Chinese authorities have also decided issue 3 trillion yuan ($411 billion) in special treasury bonds next year — the largest amount on record — to boost fiscal stimulus, according to Reuters.
China will face greater challenges with Donald Trump in the White House. Trump’s threat to impose higher tariffs on Chinese goods could further threaten the Chinese export sector, which is already facing increased trade barriers from the European Union.
