China’s factory activity showed a slump for the eighth consecutive month this year, remaining below 50 at 49.2 in November from 49 in October, as per China’s National Bureau of Statistics.
The manufacturing purchasing managers index (PMI) is measured on a scale between 0 and 100, with a reading below 50 indicating contraction.
While the contraction was in line with analyst expectations, the data underscores challenges for the country’s economy which is faced with a prolonged slump in property market, lower real estate investments, and intense price competition domestically in many sectors including the auto industry.
A meeting between US President Donald Trump and Chinese leader Xi Jinping in South Korea on October 30 had let to a trade truce, with Trump cutting additional tariffs on Chinese goods, raising optimism over Chinese exports gaining competitiveness in the US market.
However, experts say it may be too early to say whether exports have regained momentum following the deal.
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Chinese officials had set a target of around 5 per cent economic growth for the whole of 2025. While the economy expanded 4.8 per cent in the July-September quarter, more government policy support is required to help boost the economy, economists said.
“Policymakers appear to be delaying further policy support,” wrote Lynn Song, chief economist for Greater China at ING bank, in a note earlier this month.
“This year’s growth target is likely to require minimal additional support to be reached,” Song wrote.
While Chinese authorities previously rolled out measures such as trade-in subsidies for home appliances and electric vehicles, some of these subsidies are set to be phased out, and sales and demand are likely to drop, analysts said.
The fading boost from the consumer goods trade-in policies may be weighing on domestic demand for manufactured goods and “signals on domestic demand have been mixed,” said Zichun Huang, China economist at Capital Economics, last week.
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