China’s factory activity unexpectedly contracted this month for the first time since February, underscoring the challenge facing Beijing as it seeks to kickstart a slowing economy.
The surprise purchasing managers index reading, alongside GDP growth below official targets, represented a “dual miss” that “intensifies pressure on Beijing” to deploy fiscal and potentially even monetary stimulus in the months ahead, Commerzbank’s senior China economist wrote in a note to clients.
The Communist Party Politburo this week pledged to boost domestic demand, but analysts noted the plan was short on details, while high levels of government debt and global trade uncertainty are limiting Chinese authorities’ room for maneuver, Goldman Sachs noted.
