- Li-Gang Liu and Louis Lam, ANZ economists
China's manufacturing activity dropped to the lowest level in more than three years, reinforcing the view the world's second biggest economy continued to cool despite a raft of government stimulus measures including six rate cuts since November 2014. The official manufacturing PMI slid to 49.6 last month, according to the National Bureau of Statistics, hitting the lowest level since August 2012 and missing the median forecast of 49.9. Sub-indexes of output, new orders, inventories and employment all slipped in the reported month. Moreover, input prices for raw materials declined to the lowest level this year. At the same time, the competing gauge of manufacturing conditions released by Caixin Media and Markit Economics rose to 48.6 in November, surpassing economists' expectations for 48.3.
However, the official services sector PMI rose in November to 53.6, up from 53.1 a month earlier, driven by online sales over Singles Day on 11 November. China's services sector has been a bright spot, helping to offset a precipitous slowdown in other industries. In the first three quarters of 2015, services made up 51.4% of the Chinese economy, up from 49.1% during the same period in 2014. China's economy grew 6.9% in the September quarter, the worst performance since the global crisis.
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