China’s factory activity extends months-long slump

BEIJING: China’s factory activity shrank for an eighth straight month in November, official data showed Sunday, suggesting the world’s second-largest economy remains subdued despite a trade truce with the United States.

The manufacturing Purchasing Managers’ Index (PMI) — a key measure of industrial health — was 49.2 in November, according to the National Bureau of Statistics (NBS).

That marked an improvement from 49.0 recorded in October but remained below the 50 mark that separates expansion from contraction.

The reading missed a median forecast of 49.4 from a Bloomberg survey of economists.

The figure comes after Chinese leader Xi Jinping and US President Donald Trump met in South Korea in October and agreed on a temporary truce in their bruising trade war.

Trump said he would halve a 20-percent tariff on Chinese goods and Xi agreed to suspend certain export restrictions on the key rare-earth sector for one year.

China would also resume purchases of US soybeans after orders came to a halt this harvest season, according to Trump.

Meanwhile, the non-manufacturing PMI, which measures activity in sectors including services and construction, was 49.5 in November, marking the first contraction in nearly three years.

That was partly attributable the “fading holiday effect” after the end of China’s “Golden Week” National Day holiday in October, NBS statistician Huo Lihui said in a statement.

Weakness in the real estate and residential services sectors also helped drag the figure down 0.6 percentage points from October.