China's Factory Activity Contracts Again as Deflation Fears Deepen
Written by AI from upi.com's report. Not checked by a person.
China's manufacturing PMI fell to 49.3 in October, returning to contraction after a single month above the 50.0 threshold, as a sharp drop in export orders added to concerns about deflation and persistently weak domestic demand.
China's manufacturing sector slipped back into contraction in October, with the purchasing managers' index (PMI) falling to 49.3, according to reports published Sunday by Chinese media outlets including the Beijing News, citing the National Bureau of Statistics. The reading was down 0.8 points from September's 50.1 and was the second-lowest in the preceding four months, dropping back below the 50.0 threshold that separates expansion from contraction.
September's brief return to expansion had followed readings of 49.2 in July and 49.8 in August, but the recovery proved short-lived. The new export orders index fell even more sharply, declining 1.3 points from 50.0 in September to 48.7 in October — a particularly troubling development given that exports had been one of the few remaining pillars of support for the economy.
Concern is growing that persistently weak domestic demand could allow deflation — a sustained decline in prices amid sluggish economic activity — to become a durable feature of the Chinese economy. Yang Yongchang, an information and communications technology businessman, offered a blunt assessment: "I can't see what lies ahead. It seems we will have to endure more hardship for some time."
China may still meet its official growth target of 4.5% to 5% for the year, having recorded cumulative growth of 4.6% across the first three quarters. The path beyond this year, however, remains uncertain, and questions persist about whether further stimulus measures can meaningfully revive domestic consumption.
