China’s factory activity unexpectedly fell to a 5-month low in October. Slowing orders and rising costs in the cooling economy contributed to the dire output.
The official Purchasing Managers’ Index (PMI) slowed to 50.8 in October from September’s 51.1 reading. The level above 50 indicates growth and below contraction.
The PMI showed foreign and domestic demand slipped to 5 and 6-month lows, respectively, with overseas orders shrinking slightly on a monthly basis.
“There remains downward pressure on the economy, and monetary policy will remain easy,” economists at China International Capital Corp said.
It has been a tough year for China’s economy. Growth fell to 7.3% in Q3, the lowest level since 2008.
China is supposed to redirect its economy by stimulating its domestic demand as the current levels of manufacturing wages are uncompetitive against some of the Emerging Asia countries [China Should Focus On Reforms And Cut Its Economic Growth Target To 7% – World Bank].
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