China’s economy still under pressure as manufacturing falls

Activity in China’s manufacturing sector unexpectedly contracted in October for a third straight month, an official survey showed yesterday, fuelling fears that the economy may still be losing momentum despite a raft of stimulus measures.

Adding to those concerns, China’s services sector, which has been one of the few bright spots, also showed signs of cooling, expanding at its slowest pace in nearly seven years.

During the summer, a $4 trillion (€3.63tn) sell-off in China’s stock market rocked the world and raised fears that the economy was slowing rapidly. The official Purchasing Managers’ Index(PMI) was at 49.8 in October, the same pace as in the previous month and lagging market expectations of 50, according to the National Bureau of Statistics. A reading below 50 points suggests a contraction. “While the PMI has stabilised, it is too early to confirm a bottoming out,” economists at ANZ Bank said.