Business: China’s manufacturing sector stable

▶ Government steps up moves to support small firms

China’s manufacturing sector remained stable in October, official data showed on Wednesday.

The country’s manufacturing purchasing managers’ index (PMI) came in at 50.2 in October, narrowing from 50.8 in September, according to the National Bureau of Statistics (NBS).

A reading above 50 indicates expansion, while a reading below reflects contraction.

“The manufacturing sector, in general, continued to expand at a slower pace,” said NBS senior statistician Zhao Qinghe. “The fundamentals of the manufacturing sector remain stable.”

Zhao said the manufacturing supply and demand in October experienced fluctuations due to factors including the National Day holiday and a complicated external environment.

Sub-index for production edged down from 53 in September to 52 in October, while the sub-index for new orders dipped from 52 in September to 50.8 in October.

China’s exports have been pretty resilient despite the intensifying China-US trade spat, but some analysts see pressure in coming months.

October is the first full month after the latest US tariffs went into effect. The US and China slapped additional tariffs on each other’s goods on September 24, and the US President Donald Trump has threatened to hit China with more duties.

Global policy makers remain anxious about the wider fallout of the US-led protectionist policies.

Japan on Wednesday reported weak industrial output for September partly as the China-US trade dispute weighed on its exports.

Wednesday’s data also showed that China’s non-manufacturing sector held steady in October, with the PMI for the sector standing at 53.9 in October, down from 54.9 in September.

The service sector, which accounts for more than half of the country’s GDP, maintained stable growth, with the sub-index measuring business activity in the industry standing at 52.1 in October, down from 53.4 in September.

Rapid expansion was seen in industries including the postal service, internet software and telecommunications, where the readings were all above 59, the NBS said.

The Chinese government has released a slew of active policies to maintain a sound and stable growth of the domestic economy.

Earlier this month China’s central bank (PBC) announced the fourth reserve requirement ratio (RRR) cut for this year, and is expected to ease monetary policy further.

It is also stepping up moves to lower financing costs and pledged more support to private firms. On the fiscal side the government has also pledged more tax cuts next year to stimulate growth.