China’s factory activity falls amid weak demand, trade war

BEIJING (AP) — China’s factory activity shrank more sharply than expected in October amid weak consumer demand and a tariff war with Washington, a survey by an industry group showed yesterday.

The monthly purchasing managers’ index of the China Federation of Logistics & Purchasing declined to 49.3 from September’s 49.8 on a 100-point scale. Numbers below 50 show activity contracting.

Chinese growth has been hurt by weakening consumer demand as shoppers, jittery over the trade war and possible job losses, put off purchases of cars and other big-ticket goods.

Exporters have been hurt by United States (US) President Donald Trump’s tariff hikes on Chinese imports in a fight over Beijing’s technology ambitions and trade surplus but the impact on the overall economy has been limited.

The latest data suggest improved activity at the end of the previous quarter “didn’t mark the start of a sustained recovery,” said Julian Evans-Pritchard of Capital Economics in a report.

Growth in the world’s second-largest economy sank to a new multi-decade low of six per cent in the quarter ending in September.

Sales of Chinese goods to the US market fell almost 11 per cent from a year earlier in the first nine months of this year.

But global exports are off only 0.1 per cent in the same period due to stronger sales to developing markets.

A woman works on a production line in a fibre optics factory in Nantong in eastern China’s Jiangsu province on August 14. China’s factory activity shrank more sharply than expected in October amid weak consumer demand and a tariff war with Washington, a survey by an industry group showed yesterday