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Chinese manufacturing activity shrunk for the sixth consecutive month in October



Workers are observed on a production line producing solar photovoltaic components at a factory in Huzhou, Zhejiang Province, China, February 12, 2019.

Lin Yunlong | Zhejiang Daily | Reuters

China on Thursday announced that factory activity shrunk for the sixth consecutive month in October, with the official index of manufacturing purchasing managers coming in at 49.3 in October.

Analysts surveyed by Reuters expected the official production of PMI from October to remain flat. PMI readings above 50 indicate expansion while those below the signal shrink below this level.

In September, the official production of PMI was 49.8, according to the country's statistics bureau.

PMI is a study of how businesses view the operating environment, such data provide a first look at what is happening in an economy, as they are usually among the first major economic indicators published every month.

PMI data in China are closely monitored by global investors for signs of problems amid a slowdown in the country's economy and a continuing trade dispute between the US and China.

Policy makers have limited opportunities to stimulate growth, especially in monetary policy, such as interest rate cuts. Prices of pork ̵

1; a staple food – have soared this year because of a viral outbreak that has led to higher food prices.

"You just have to really refine it," Hao Hong, head of research and chief strategist at Communications International, told CNBC on Thursday.

"This is indeed a disturbing difficulty that the central bank cannot reduce the interest rate to stimulate growth, so as a result, the Chinese market tends not to do very well when the economy slows down while inflation slows down. increases, "he told CNBC Street Signs.


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