Chinese manufacturing declines in October: Caixin PMI | So Good News
By Ambar Warrick
Investing.com– Chinese manufacturing activity fell in October, a private survey showed on Tuesday, as Covid-related sanctions continued to disrupt China’s massive manufacturing sector.
It fell to a near 15-year low after the reading and was down 0.3% at 7.3228 against the dollar.
It reached 49.2 for October. The reading was slightly better than expectations of 49.0 and September’s 48.1.
Still, A reading below 50 indicates contraction; The Caixin PMI has read below 50 for the third straight month. New cases of COVID in industrial hubs such as Shanghai and Wuhan have seen cities reimpose travel restrictions; likely to force. Poor reading in October.
Caixin follows a paper on Monday showing China’s manufacturing sector worsened significantly in October, more than expected. There is also a domestic contract.
Government PMI differs from Caixin data in the scope of survey participants. The government survey targets larger state-owned enterprises, while the Caixin PMI covers smaller private enterprises. Investors usually use both readings to paint a broader picture of the Chinese economy.
China’s strict COVID-19 policy has been a major factor in its economic woes this year. A series of COVID-19 lockdowns in major industrial hubs have brought businesses to a standstill. October’s data show that the Chinese economy may become more corrupt in the short term after the relief.
Data released last month showed that it grew more than markets had expected in the third quarter, but missed growth forecasts from the People’s Bank.
The government has released some stimulus measures this year to help spur economic growth. However, the country’s economic situation still lacks measures to drive significant growth. Chinese factories are facing a slowdown in overseas demand due to a slowdown in global economic growth.
Foreign investors are also wary of China after the government recently reiterated its support for its COVID-19 policy. There have also been concerns about anti-economic measures in the country after Chinese President Xi Jinping won a third consecutive term.