A worker welds at an agricultural machinery manufacturing enterprise in the Qingzhou Economic Development Zone in Qingzhou, China, August 31, 2024.
Cost photo | Nurphoto | Getty Images
The increase in Chinese factory activity in November was worse than analysts' expectations on Tuesday, signaling that Beijing's stimulus measures were not enough to significantly boost the country's troubled economy.
Official National Purchasing Managers' Index for December was 50.1, data published by Data from the National Statistical Office showed.
The reading exceeded Reuters expectations of 50.3. Manufacturing activity was 50.3 in November and 50.1 in October. A PMI reading above 50 indicates an increase in activity, while a reading below indicates a decrease.
Investors will also keep an eye on the Caixin/S&P Global Manufacturing Purchasing Managers' Index, which is scheduled for release on Thursday.
“For the Chinese economy, 2024 will be remembered as a year of turmoil,” said Larry Hu, Macquarie Group's chief China economist.
“Deflationary pressures persist because policy stimulus is sufficient to achieve the GDP target but is insufficient to revalue the economy,” he added.
The Chinese economy has shown some recovery following the introduction of a series of stimulus measures end of September.
However, other recent economic data from China shows that the world's second-largest economy remains in a phase of disinflation, mainly due to weakening consumer demand and a prolonged deterioration in the property market.
Consumer inflation in China fell to its lowest level in five months in November, however data on the country's exports and imports below expectations. Additionally, the latest Retail sales data were also disappointingno Reuters forecasts.
China's Industrial Profits extended declines for a fourth consecutive month, falling 7.3% in November than a year earlier.
Last week This was announced by the Ministry of Finance of China it would increase fiscal support next year to help spur consumption by increasing trade in consumer goods, raising pensions and medical insurance subsidies for residents.
The Chinese authorities have also decided issue special treasury bonds worth 3 trillion yuan ($411 billion). According to Reuters, next year – the largest amount in history – to increase fiscal stimulus efforts.
China will face greater challenges when Donald Trump takes office in the White House. Trump's threat impose higher tariffs on Chinese goods could further harm China's export sector, which is already struggling with increased trade barriers from the European Union.