**China’s Economic Woes Persist as Factory Activity Contracts for Fifth Consecutive Month**
Despite a slight uptick in the official manufacturing purchasing managers’ index (PMI) to 49.8 in September, China’s factory activity has now contracted for five consecutive months. The reading, released by the National Bureau of Statistics, remains below the 50 mark, indicating a continued decline in activity.
While the data beat economists’ expectations, the private Caixin PMI survey painted a more dire picture, with a reading of 49.3, marking the sharpest contraction in 14 months. The decline was driven by dwindling demand and a weakening labor market.
The manufacturing sector is facing significant headwinds, including a prolonged economic slowdown, a property crisis, and Western restrictions on Chinese exports. These challenges have contributed to weak domestic demand, a downturn in the housing sector, and rising unemployment.
Recent economic indicators have been disappointing, with industrial profits plummeting 17.8% in August, and retail sales, industrial production, and urban investment all growing at a slower pace than expected.
In response, the Chinese government has taken steps to stimulate the economy, including cutting the reserve requirement ratio and lowering interest rates. Top leaders have also emphasized the need for stronger fiscal and monetary policy support to address the property decline.
Despite these efforts, China’s economic growth remains sluggish, and the country’s leaders face an uphill battle to revive momentum.
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