The Chinese economy has continued to struggle despite repeated efforts to stimulate activity, according to official data, raising the prospect of further measures from Beijing if the country is to reach its growth targets. China's enormous manufacturing sector surprisingly contracted for the third consecutive month in October, while its services sector - the economy's growth engine - expanded at the slowest rate since 2008's financial crisis. The figures raise new fears that growth in the world's second-biggest economy could fall below 7pc this year, after official data last month showed expansion of 6.9pc in the year to September. Weak demand in China has already had a huge effect on the world economy, potentially delaying interest rate rises and hitting commodity prices. The country's central bank has repeatedly cut bank lending requirements in an attempt to boost growth and ward off deflation, but economists suggested the new figures could herald further measures. "As deflation risks intensify, a further RRR cut [the reserves a bank must hold against lending] before end of this year is still possible," economists at ANZ Bank said. Sunday's PMI figures from China's National Bureau of Statistics gave a reading of 49.8 for the country's manufacturing sector, below the 50 mark that separates contraction from expansion for the third month in a row. Markets had widely expected a rebound, with expectations set at 50..."Because of the recent weak recovery in the global economy and downward pressure in the domestic economy, manufacturers still face a severe import and export situation," Zhao Qinghe, a senior statistician at the NBS, said. Meanwhile, the services sector, which has helped make up for disappointing factory output, saw its slowest growth for seven years. The non-manufacturing PMI fell from 53.4 in September to 53.1. China's official figures for economic growth, which are widely believed to over-estimate the true level, fell to 6.9pc in the third quarter of the year, the lowest pace of expansion since early 2009. This compares to a rough target of 7pc set by Beijing.
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Friday, November 6, 2015
The Chinese economy has continued to struggle despite repeated efforts to stimulate activity, according to official data, raising the prospect of further measures from Beijing if the country is to reach its growth targets. China's enormous manufacturing sector surprisingly contracted for the third consecutive month in October, while its services sector - the economy's growth engine - expanded at the slowest rate since 2008's financial crisis. The figures raise new fears that growth in the world's second-biggest economy could fall below 7pc this year, after official data last month showed expansion of 6.9pc in the year to September. Weak demand in China has already had a huge effect on the world economy, potentially delaying interest rate rises and hitting commodity prices. The country's central bank has repeatedly cut bank lending requirements in an attempt to boost growth and ward off deflation, but economists suggested the new figures could herald further measures. "As deflation risks intensify, a further RRR cut [the reserves a bank must hold against lending] before end of this year is still possible," economists at ANZ Bank said. Sunday's PMI figures from China's National Bureau of Statistics gave a reading of 49.8 for the country's manufacturing sector, below the 50 mark that separates contraction from expansion for the third month in a row. Markets had widely expected a rebound, with expectations set at 50..."Because of the recent weak recovery in the global economy and downward pressure in the domestic economy, manufacturers still face a severe import and export situation," Zhao Qinghe, a senior statistician at the NBS, said. Meanwhile, the services sector, which has helped make up for disappointing factory output, saw its slowest growth for seven years. The non-manufacturing PMI fell from 53.4 in September to 53.1. China's official figures for economic growth, which are widely believed to over-estimate the true level, fell to 6.9pc in the third quarter of the year, the lowest pace of expansion since early 2009. This compares to a rough target of 7pc set by Beijing.
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