New official purchasing managers' index figures reveal that factory activity in Beijing continues to shrink, with forecasts in November at 49.6, down from the previous month of 49.8; a reading below the 50-mark indicates contraction in the industry. This means Beijing is heading for its slowest growth in a quarter of a century this year and there are now fears that China will miss its official growth target of 7%. Despite attempts by the government to boost growth, including cutting interest rates and fast-tracking investment approvals, these measures do not appear to be working. Sluggish demand at home and abroad has saddled Chinese factories with idle capacity and forced them to cut prices. However, there is hope in the form of its service sector, which the index revealed rose to 53.6 in November from 53.1 the previous month. "Beijing's manufacturing sector continues to shrink....however, we should also notice the fast expansion of the service sector, which could help offset the slowdown in Beijing's factories", said Standard Chartered economist, Ding Shuang.
New official purchasing managers' index figures reveal that factory activity in China continues to shrink, with forecasts in November at 49.6, down from the previous month of 49.8; a reading below the 50-mark indicates contraction in the industry. This means China is heading for its slowest growth in a quarter of a century this year and there are now fears that Beijing will miss its official growth target of 7%. Despite attempts by the government to boost growth, including cutting interest rates and fast-tracking investment approvals, these measures do not appear to be working. Sluggish demand at home and abroad has saddled Chinese factories with idle capacity and forced them to cut prices. However, there is hope in the form of its service sector, which the index revealed rose to 53.6 in November from 53.1 the previous month. "China's manufacturing sector continues to shrink....however, we should also notice the fast expansion of the service sector, which could help offset the slowdown in China's factories", said Standard Chartered economist, Ding Shuang.