Chinese manufacturing growth slows in November

Manufacturing activity in China has fallen to a two-month low on shrinking new export orders, a preliminary private survey showed on Thursday.

Reuters reports that the HSBC Flash China Manufacturing Purchasing Managers’ Index (PMI) came in at 50.4 points in November. This compares to the October result of 50.9.

Despite the fact that the figure was low, the result still reflects a modest expansion in the Chinese manufacturing sector. A figure greater than 50 reflects expansion, while a figure less than 50 reflects contraction.

The index is released a week before final PMI data and is based on 85 per cent to 90 per cent of total survey responses each month.

“China’s growth momentum softened a little in November, as the HSBC Flash China Manufacturing PMI moderated due to the weak new export orders and slowing pace of restocking activities,” said Hongbin Qu, chief China economist at HSBC.

“The muted inflationary pressures should enable Beijing to keep policy relatively accommodative to support growth,” he added in a comment accompanying the PMI.

The result comes as the Chinese government has announced that it is prepared to accept a slower growth rate as it attempts to move the economy away from investment and export towards consumption.

China’s top leadership unveiled economic economic and social reforms last week. These are expected to give China fresh drivers of growth.