Published: Mon, December 02, 2019
Markets | By Otis Pena

China factory activity expands in seventh month after 6-month losing streak

China factory activity expands in seventh month after 6-month losing streak

But gains were slight, and export demand remained sluggish.

China's factory activity rebounded for the first time in seven months in November, data showed on Saturday, despite the looming threat of the new U.S. tariffs in few weeks if Beijing and Washington fail to sign a partial trade deal.

The results were compared with 49.3 in October.

PMI data signalled a further modest improvement in the health of China's manufacturing sector during November. This will continue to give support to new orders in the coming year. Factory output also rose to 52.6 in November, marking the strongest pace since March.

"In the short term, we may have already passed the low point where the economy hit the bottom", Zhang Deli, a macro with Lianxun Securities analyst, wrote in a note.

China has asked local governments to speed up the issuance of 1 trillion yuan of debt earmarked for infrastructure such as roads, water conservancy and healthcare facilities, so that the proceeds can be invested early in 2020 to help shore up the slowing economy. Some analysts say that could be a sign that the government is anxious about the downward economic pressure.

But recent developments underline the increased uncertainty in trade conflicts, which bodes ill for the prospects of external demand. Coupled with rising domestic demand, total new orders rose strongly in November "with a number of firms citing firmer underlying demand conditions", according to the survey, though the reading dipped slightly from October when the growth rate was the highest in almost six years.

Mobile calls, data to get expensive from December 3
According to reports, the telecom sector is under a debt of Rs 7.88 lakh crore as per data released by the Parliament last month. It features unlimited off-net voice call, daily 2 GB highspeed data and 100 SMS, valid for 28 days.

US President Donald Trump said this week that the world's largest economies are close to reaching agreement on the first phase deal. But trade experts and people close to the White House said it could be rolled into the new year, given China urged to broader tariff rollbacks.

An additional 15% in United States tariffs are scheduled to take effect on about $156 billion of Chinese products on December 15.

China last week held off from retaliating against the USA after President Trump signed a bill supporting Hong Kong's anti-Beijing protesters.

Export and import orders saw an increase, thanks to increasing overseas orders for Christmas and growing domestic consumption, up 1.8 and 2.9 percentage points from last month at 48.8 and 49.8 in November, respectively.

Many Chinese exporters are small and private firms.

NBS data also shows that the PMI for China's non-manufacturing sector came in at 54.4 in November, the highest since April, up from 52.8 in October, indicating that the non-manufacturing industry maintained its overall expansion momentum.

The official August composite PMI, which covers both manufacturing and services activity, dropped to 53.0 from July's 53.1.

Like this: