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The
PMI is measured on a scale between 0 and 100, with a reading
below 50 indicating contraction. The contraction was in line
with analyst expectations.
A U.S. tariff cut earlier this month likely would mean that
Chinese exports could gain competitiveness in the U.S. market,
but it may be too early to say whether exports have regained
momentum following the trade truce.
U.S. President Donald Trump said the U.S. would cut its tariffs
on Chinese goods after meeting Chinese leader Xi Jinping in
South Korea on Oct. 30, raising some optimism over Chinese
exports and manufacturing.
A prolonged slump in China’s property market and falling home
prices are still hurting consumer confidence, and real estate
investments have been down. Intense price competition
domestically in many sectors including the auto industry have
also put pressure on many businesses.
More government policy support is required to help boost the
economy, economists said.
But “policymakers appear to be delaying further policy support,”
Lynn Song, chief economist for Greater China at ING bank, wrote
in a note earlier this month.
While Chinese authorities previously rolled out measures such as
trade-in subsidies for home appliances and electric vehicles,
some of these subsidies are set to be phased out, and sales and
demand are likely to drop, analysts said.
The fading boost from the consumer goods trade-in policies may
be weighing on domestic demand for manufactured goods and
“signals on domestic demand have been mixed,” said Zichun Huang,
China economist at Capital Economics, last week.
Chinese officials have set a target of around 5% economic growth
for the whole of 2025. The economy expanded 4.8% in the
July-September quarter.
“This year’s growth target is likely to require minimal
additional support to be reached,” Song wrote.
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