China’s factory activity slows down in October, missing expectations, private PMI shows
Robots manufacture auto parts at a factory in Ningde, China, on Oct. 17, 2024.
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China’s factory activity growth in October missed market expectations, as trade tensions with the U.S. intensified during the month, according to a private survey released Monday.
The RatingDog China General Manufacturing PMI, compiled by S&P Global, dropped to 50.6 in October from the six-month high of 51.2 in September, missing analysts’ expectations of 50.9 in a Reuters poll.
Staying above the 50-benchmark that separates growth from contraction, the private survey numbers were better compared to the official survey released last Friday that showed manufacturing activity falling to 49.0, its worst contraction in six months.
Private surveys, previously conducted by Caixin and S&P Global, have usually painted a better picture than official polls over the past years as they have focused more on export-oriented manufacturers.
The RatingDog private survey covers 650 manufacturers and collects responses in the second half of each month while the official PMI surveys a larger sample of over 3,000 companies at month-end.
With the extension of the U.S.-China trade truce and expected recovery in export orders, the manufacturing PMI is likely to rebound modestly in the coming months as business confidence stabilizes, said Dongming Xie, managing director and head of Asia macro research at OCBC Bank.
China and the U.S. reached a trade truce last week following a meeting between American President Donald Trump and his Chinese counterpart, Xi Jinping, in South Korea, stabilizing relations after an escalating trade battle that had sparked fears of a global economic downturn.
Under the agreement, the U.S. will lower the fentanyl-linked tariffs on Chinese goods by half to 10%, taking the total rate on Chinese goods to around 47%, in response to China pausing its sweeping export controls on rare earth metals.
The U.S. will also suspend the implementation of the 50% ownership “penetration rule” under export controls and the Section 301 investigation into China’s maritime, logistics and shipbuilding sectors.
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