Manufacturing in China shrunk for the third month straight in October, according to the latest official factory survey released on Sunday.
China’s Purchasing Managers’ Index (PMI) was 49.8 in October.
A PMI reading below 50 indicates contraction while a reading above 50 indicates growth.
Zhao Qinghe, a senior statistician at China’s National Bureau of Statistics said in a statement: ”Because of the recent weak recovery in the global economy and downward pressure in the domestic economy, manufacturers still face a severe import and export situation,”
The figure was the same as September, however, economists expected a reading of at least 50.
China’s economy is expanding at the slowest rate since the global financial crisis
Last week a report revealed that the Chinese economy expanded at a rate of 6.9% between July and September from a year earlier, the weakest rate since the financial crisis and down from 7 percent in the first two quarters of 2015. It should also be noted that many economists believe that growth may actually be weaker than what the government reports.
The country’s economy has been hit by a slowdown in global demand and a slump in market optimism.
Beijing has implemented measures to try and boost growth again. This year alone the government has cut interest rates five times.
Economists at ANZ Bank say that there could be more measures down the road: “While the PMI has stabilised, it is too early to confirm a bottoming out,” the bank said.
“However, expansionary fiscal policy and further eased monetary policy should help engineer a modest rebound in the fourth quarter and the first quarter of 2016,” ANZ said in a note to clients.
