It is obvious that China’s economy continues to decline and market demand is weak.
The Manufacturing PMI (Purchasing Managers’ Index) released by the National Bureau of Statistics (NBS) recorded 49.2 in October, down 0.9 percentage points, contracting again; the Services Business Activity Index and the Composite PMI Output Index both plunged 1.9 percentage points, recording 47.0 and 49.0 respectively, both are the lowest since June.
Regarding inflation, input prices rose for the first time in 3 months due to high raw materials prices. Selling prices, on the contrary, fell for the sixth month running, an effort by firms to promote sales.
Overseas demand dropped for the third month in a row, as global cost pressures lingered. Domestic demand is also weak. According to the “Third Quarter Survey of Urban Households Savings” (pdf) released by the People’s Bank of China (PBoC) in October, Chinese residents’ “intentional willingness to save continues to be stronger.” The proportion of residents who prefer to “spend more” decreased by 1.0 percentage point from the second quarter to 22.8 percent. Meanwhile, the Employment Sentiment Index continued to fall to 35.4 percent, the lowest since the third quarter of 2019….