As of September 2024, China's manufacturing sector is grappling with ongoing challenges, as indicated by the latest data from the National Bureau of Statistics. The Purchasing Managers' Index (PMI) rose slightly to 49.8 in September from 49.1 in August, but this marks the fifth consecutive month of contraction, signaling persistent weaknesses in the economy [9dfb5be2].
The Caixin purchasing managers survey revealed that new manufacturing orders fell at the fastest pace in two years during September, further underscoring the struggles faced by the sector [9dfb5be2]. While the official PMI indicates a slight improvement, the new manufacturing export order subindex dropped to 47.5, reflecting continued challenges in international demand [3b9540d7].
In response to these economic pressures, the Chinese government is ramping up support measures. The central bank has announced plans to cut mortgage rates by October 31, and cities like Guangzhou have lifted home purchase restrictions to stimulate the struggling property sector [9dfb5be2]. Despite these efforts, the property market continues to face difficulties due to previous government crackdowns, which have dampened investor confidence [9dfb5be2].
Interestingly, the Chinese stock markets reacted positively to the announcement of these new policy measures, with the Shenzhen index surging by 8.2% and the Shanghai Composite rising by 5.7% [9dfb5be2]. The overall composite PMI stood at 50.4, an increase from 50.1, yet analysts describe the current readings as 'mixed messages,' highlighting the fragility of the economic recovery [3b9540d7].
The economy expanded at a rate of 4.7% in the last quarter, slightly below the government's target of 5%, indicating that while there are signs of recovery, significant hurdles remain ahead [9dfb5be2]. As China navigates these turbulent economic waters, the outlook remains uncertain, influenced by both domestic policy changes and international market conditions.