China’s economy is under pressure due to weak manufacturing.

China's economy is under pressure due to weak manufacturing.

(AP) BEIJING — Two polls released on Friday revealed that the growth in industrial activity in China was sluggish in September, export orders decreased, and employers made job cuts, adding to the pressure on the economy’s dismal growth.

On a scale of 100 points, the Caixin business news magazine’s monthly purchasing managers’ index decreased from August’s value of 49.5 to 48.1, with readings below 50 indicating activity contraction. An official industrial group’s separate PMI increased from 49.4 to 50.1.
In a report, Zichun Huang of Capital Economics stated that “the surveys suggest that China’s economy continued to lose pace.”
This complicates matters for Chinese authorities who are attempting to halt an economic downturn after growth dropped to 2.2% in the first half of 2022, less than half the official objective of 5.5%.

Weak consumer demand from China and the rest of the world, as well as a decline in real estate development brought on by government restrictions on the use of loans in the sector, have impeded these efforts.

Caixin’s index of fresh export orders dropped to 48.1 from 49.8—a four-month low—and the China Federation of Logistics & Purchasing said that its own barometer dipped to 47 from 48.1. Both claimed that indicators of employment were in the red, indicating that businesses had slashed positions.

We anticipate that the economy will continue to be poor through 2023, Huang said.