China’s Nov factory, services activities fall to 7-month lows on COVID curbs

BEIJING  – China’s factory activity contracted at a faster pace in November, an official survey showed on Wednesday, weighed down by softening global demand and COVID-19 restrictions, underscoring the added pressure faced by the world’s second-largest economy.

The official manufacturing purchasing managers’ index (PMI) stood at 48.0 against a 49.2 reading in October, the National Bureau of Statistics (NBS) said. Economists in a Reuters poll had expected the PMI to come in at 49.0.

The 50-point mark separates contraction from growth on a monthly basis.

Separately, the non-manufacturing PMI, which looks at service sector activity, fell to 46.7 from 48.7 in October, also the lowest reading in seven months.

China’s economy, already under pressure from a property slump and weakening global demand for Chinese goods, experienced a broad slowdown in October, adding to concerns about growth in the last quarter of 2022.

Chinese authorities this month rolled out a flurry of policies to prop up the struggling economy, including reserve requirement ratio cuts and COVID fine-tuning measures, while loosening financing curbs to rescue the property sector.

The securities regulator earlier this week lifted a ban on equity refinancing for listed firms, in the latest support measure for the cash-squeezed real estate sector. Markets cheered the move, with shares and bonds of Chinese property companies rising.

China also was roiled by rare street protests across many cities over the weekend due to the stringent COVID-19 measures.

Analysts from Nomura said in a report on Monday areas and facilities representing some 25.1 percent of China’s total GDP was now under lockdown, up from the previous peak value of 21.2 percent recorded in April, when Shanghai was under a full-scale lockdown.

The official manufacturing PMI largely focuses on big and state-owned firms. The private sector Caixin manufacturing PMI, which centres more on small firms and coastal regions, will be published on Thursday.