China factory activity expands in November after 6-month losing streak

China factory activity unexpectedly returns to growth after 6 months

A gauge of China's manufacturing sector jumped unexpectedly last month, signaling a recovery in activity amid government support and a stabilizing global economy.

China's official manufacturing PMI rose to 50.2 in November from 49.3 in October, the National Bureau of Statistics said Saturday.

The reading is slightly above the 50-point mark that separates growth and contraction every month.

China's factory activity rebounded for the first time in seven months in November, data showed on Saturday, despite the looming threat of the new United States tariffs in few weeks if Beijing and Washington fail to sign a partial trade deal.

Manufacturing accounted for almost 30% of China's gross domestic product in the first nine months of this year, according to data (link in Chinese) from the National Bureau of Statistics (NBS).

"Export orders dropped at the fastest rate since mid-year amid reports of demand weakness at key trade destinations, namely China".

In terms of fiscal policy, the Ministry of Finance has announced a new quota of 1 trillion yuan ($142 billion) of local government special bonds for 2020 and urged that the bonds be issued and used "as early as possible" to boost infrastructure investment. Total new orders bounced back to expansionary territory with the sub-index rising to 51.3, the highest level seen since April.

But the latest report also says the manufacturing sector is still facing downward pressure.

US President Donald Trump said this week that the world economy close to reaching an agreement on the first phase of the agreement.

An additional 15% in U.S. tariffs are scheduled to take effect on about $156 billion of Chinese products on December 15. This reflects concerns about the prolonged trade negotiations, and Washington's recent passing of a law supporting human rights and democracy in Hong Kong.

Drive Beijing to guide more bank loans to small private companies appear to be working.

The NBS pointed out the growth meant a 0,9 percent rise compared to October and it shows a recovery of the industry after six months shrinking.

The official non-manufacturing PMI picked up to 54.4, recovering from October's 52.8, the lowest point since February 2016. However, the sector's resilience weakened late a year ago amid a broader economic slowdown.



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