An initial survey of China’s factory sector for September unexpectedly shrank to its lowest level since 2009 as the slowdown in the Chinese economy intensifies. Meg Teckman reports.
Chinese factory activity falls sharply
A private survey tells of more pain for China’s factory sector – and economy – in September.
A worse-than-expected initial reading of the Caixin/Markit PMI falling to a fresh six-and-a-half-year low of 47 even.
Well below the 50 line that separates expansion and contraction.
This reading marks the seventh-straight month of shrinking in the sector.
And as orders continue to fall, factories are slashing output, prices, and jobs.
This weak manufacturing activity also puts increased pressure on the overall economy says economist Geoff Lewis.
(SOUNDBITE) (English) INDEPENDENT ECONOMIST AND MARKET STRATEGIST, GEOFF LEWIS, SAYING:
“Clearly the Chinese economy is still in a process of gradually contracting. And the authorities should really take this as a wake-up message. They really need to pull out more stops in terms of fiscal and monetary policy. They have the space to do so, but they’ve been remarkably laid back, in my view, because this has been an long, on-going process and they could’ve done rather more rather sooner.”
Despite recent promises from Premier Li Keqiang about no hard landing for the economy, investors are still wary.
Stocks in Shanghai fell around two percent in the morning session after the announcement.