China’s manufacturing and services fell in October due to the bite of the Covid-19 policy. | So Good News


The National Bureau of Statistics (NBS) said on Monday that China’s manufacturing restrictions appear to have had an adverse effect as the country’s Purchasing Managers’ Index (PMI) fell to 49.2 in October. In September, the PMI was 50.1.

In PMI parlance; A score above 50 indicates expansion and a score below 50 represents contraction.

Also, the non-manufacturing PMI, a measure of service sector activity, also fell to 48.7 from 50.6 in September.

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“This points to a further loss of momentum this month as virus disruptions worsen and export orders come under pressure,” Zichun Huang, an economist at Capital Economics, told Reuters.

“With the Zero-Covid policy here to stay, we think the economy will continue to struggle through 2023.”

So far, about 232 million people in 31 cities have been put under lockdown, Nomura said in a research note.

Experts believe China’s overly strict Covid-19 policy could further undermine the country’s economic recovery, and the restrictions are expected to remain in place for some time.

“We don’t expect the cancellation of the COVID policy until 2024, which means virus disruptions will dampen in-person services,” said Capital Economics’ Huang.

The adverse impact of the Covid restrictions has already been felt at Apple supplier Foxconn’s iPhone manufacturing plant in the Chinese city of Zhengzhou.

The company has decided to reduce iPhone shipments by 30 percent in November, Reuters reported, citing a source.

The factory, which employs around 200,000 workers, has been hit by workers’ discontent over strict Covid measures in recent days.

Dozens of migrant workers reportedly fled the factory for their hometowns over the weekend, prompting cities to rush plans to accommodate them.

(with inputs from agencies)

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