China factory activity steady in October — Independent data

BEIJING: Chinese factory activity stabilised in October, according to independent data released yesterday, one day after a disappointing official reading suggested output growth had slowed.

The world’s second- largest economy registered 6.8 per cent growth in the third quarter of the year, down from 6.9 per cent in the first two quarters.

But experts have warned of a slowdown ahead as the country tightens financial controls to slow the pace of debt growth and reduces production in the northeast to tackle the country’s notoriously bad air quality.

The Caixin Purchasing Managers Index (PMI) – an indicator of conditions at small manufacturers – came in at 51.0 in October, unchanged from the previous month.

A PMI figure above 50 represents growth while anything below points to contraction.

“October survey data signalled a further marginal improvement in manufacturing operating conditions across China,” Caixin said in a statement with data compiler IHS Markit.

“But the stringent production curbs imposed by the government to reduce pollution and relatively low inventory levels have added to cost pressures on companies in midstream and downstream industries, which could have a negative impact on production in the coming months,” Caixin analyst Zhengsheng Zhong wrote.

While new business and new export sales rose moderately in October, production expansion stagnated and manufacturers continued reducing staff levels, according to Caixin. — AFP