The Chinese communist regime’s National Bureau of Statistics released the manufacturing purchasing managers’ index (PMI) for September, which stood at 49.8 percent, indicating ongoing economic contraction despite regime stimulus measures that led to a rise in the stock market. This marks the fifth consecutive month that China’s PMI has been below the threshold of 50 percent. PMI is an indicator of economic trends in the manufacturing and service sectors, with a reading below 50 indicating economic contraction.
Data from Caixin and S&P Global showed that China’s general PMI in September was 49.3, down by 1.1 percentage points from August and lower than analysts’ forecast of 50.5. According to Caixin’s report, “China’s manufacturing sector contracted at the fastest rate in 14 months in September as demand shrank and the labor market weakened.”
Among the sub-indexes of China’s manufacturing PMI, four are in contraction territory while only the production index reached 51.2 percent. The official number for China’s nonmanufacturing sector came in at a neutral level of 50 in September, reaching its lowest level since September 2023.
On Sept.24, China’s central bank launched a large stimulus plan to combat economic challenges caused by COVID-19 pandemic. The stimulus package includes cutting benchmark interest rates and deposit reserve ratio by 50 basis points, releasing about $142 billion worth of new loans.
In response to these measures, China’s three major stock indexes rebounded quickly to levels not seen in months; however, more than hundred listed companies reduced their holdings during this period.
Weak PMI data usually bring negative expectations for the economy; however, some experts believe that recent rise in China’s stock market may reflect more on market expectations for government intervention rather than optimistic expectations for economic recovery.
Chinese American economist Davy J.Wong stated that “PMI continues to be below the mark which proves downward pressure on China’s economy has not changed.” He attributed this stagnation to factors such as state advancement over private sector and foreign investment withdrawal.
Experts also expressed concerns about long-term effectiveness of monetary easing policies implemented by Chinese regime due to insufficient domestic demand and low public confidence.
Without deep structural reforms addressing these issues, experts predict that economic stimulus measures may exacerbate risks within financial markets and potentially trigger a larger economic crisis.
