(Dec 1): China’s manufacturing activity surprisingly contracted in November for the first time in four months as new orders almost stalled, according to a private survey, adding to worrying signs about the economy’s deepening slowdown.
The RatingDog China manufacturing purchasing managers’ index slumped to 49.9, according to a statement released on Monday, falling below the 50 mark that separates growth and contraction. The median estimate of economists surveyed by Bloomberg was 50.5.
“The PMI is expected to present a weak expansion trend in December,” Yao Yu, founder of RatingDog, said in the statement. “Considering the need to sprint towards the annual 5% growth target, there may be strengthened efforts on both the supply and demand sides at the end of the year.”
The results of the private survey confirmed the weakness shown by the official reading released Sunday, which indicated factory activity extended its streak of declines to a record. The two surveys cover different sample sizes, locations and business types, with the private poll focusing on small and export-oriented firms.
The assessments add to a picture of an economy suffering a loss of momentum this quarter, with investment in an unprecedented decline and consumer demand still sluggish. But tensions with the US have eased after a temporary truce reached weeks ago, following a meeting in South Korea between US President Donald Trump and Chinese President Xi Jinping.
See also: Chinese factory activity slump reaches longest stretch on record
When the standoff with the Trump administration escalated in October, Chinese exports unexpectedly contracted as global demand failed to offset the slump in shipments to the US. Chinese industrial enterprises saw their earnings drop in October for the first time in three months.
Key details of the deal with the US, including questions over Chinese shipments of rare earths, are still being negotiated, underscoring the fragility of the agreement. A diplomatic spat with Japan in recent weeks has added to trade uncertainty, as China contemplates economic countermeasures.
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