BEIJING (Reuters) – China’s manufacturing activity contracted sharply in September as new orders at home and abroad cooled, sending confidence among factory owners to near record lows, a private sector survey showed on Monday. It became clear.
The Caixin/S&P Global Manufacturing PMI in September was 49.3, down from 50.4 the previous month and below the 50.5 expected by analysts polled by Reuters. This figure was the lowest since July last year.
Last week, Chinese authorities announced an aggressive stimulus package to cut interest rates and inject liquidity into the banking system, as the government seeks to pull economic growth back toward this year’s target of around 5%.
Last week, at an unusual Politburo meeting in September focused on macroeconomic issues, Chinese leaders acknowledged that the economy faces “new challenges” and called for more “powerful” stimulation of growth. He called for new policies to address the issue.
Although production expanded for the 11th consecutive month in September, new orders fell sharply from the increase in August. The new orders sub-index was the lowest in two years.
Exports are a bright spot for the economy, but new orders from overseas fell at the slowest pace since August last year. Chinese manufacturers said weaker external demand led to a decline in export orders.
The United States has implemented significant tariff increases on Chinese goods, including electric vehicles (EVs), and the European Union is expected to make a final decision on potential EV tariffs soon.
Overall confidence was affected by concerns about the global trade outlook. Manufacturer optimism has fallen to its second lowest level since data collection began in April 2012. Confidence hit rock bottom in June 2019 during the Trump administration’s U.S.-China trade period.
Slower demand led to lower average input prices, further contributing to rate reductions in September. Export charges have also been eased as competition intensifies.
Companies also reduced their workforce due to workload and cost concerns. The turnover rate was the fastest in five months.
Caixin’s survey appears to target small, export-oriented companies.
