- Julian Evans-Pritchard, China analyst at Capital Economics
Activity in China's manufacturing sector slowed again, adding to recent signs an economic slowdown is deepening. The official Manufacturing PMI reading, released by the National Bureau of Statistics and China Federation of Logistics and Purchasing, dropped to an eight-month low of 50.3 in November down from 50.8 in October. Separately, a private survey form the HSBC showed its manufacturing PMI declined to 50.0 in November, the lowest level in six months. Rising costs and falling demand were the main drag on the activity in the sector.
Growth in the world's second biggest economy slowed to 7.3% in the three months through September, the slowest pace since the global financial crisis. The risk that China might miss its official growth target of 7.5% this year for the first time in 15 years is growing as economic data has been coming out markedly weaker than expected. China's economy has been hurt by a sagging property market, unsteady export growth and cooling domestic demand and investment. It is projected that authorities might intensify easing measures in December to ensure the 2014 growth at around 7.5%. After months of sticking to modest stimulus measures, the People's Bank of China unexpectedly cut the one-year lending rate by 0.4 percentage point to 5.6%, while one-year deposit rate was reduced to 2.75% from 3%.
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