New Purchasing Managers’ Index (PMI) data for September indicates that China’s economic rebound remains uneven, with manufacturing measures reflecting persistently sluggish domestic demand and continued uncertainties over trade tensions with the US.
While more detailed data showed marginal month-on-month improvements in new orders and production, the overall picture was described by Stephen Innes of SPI Asset Management as less like a 'coherent growth engine and more like a car with one cylinder firing while another misfires.' The core issue remains a significant pressure on companies to cut prices, forcing them to operate on thinner margins due to rough competition in the market.
This scenario—described metaphorically as 'street vendors selling more bowls of noodles at half price just to keep the crowd coming'—suggests that while output is accelerating slightly, according to the National Bureau of Statistics chief statistician Huo Lihui, this growth is being bought at the cost of profitability.
The country's official manufacturing PMIs first slipped back into contraction in April as trade friction escalated following the US election.
Although a pause in steep US tariff hikes has been extended until November, and recent diplomatic phone calls offer 'glimmers of hope,' the fundamental challenges of weak domestic consumption and geopolitical trade uncertainty continue to weigh heavily on China’s vast manufacturing sector, delaying a full economic recovery.
While more detailed data showed marginal month-on-month improvements in new orders and production, the overall picture was described by Stephen Innes of SPI Asset Management as less like a 'coherent growth engine and more like a car with one cylinder firing while another misfires.' The core issue remains a significant pressure on companies to cut prices, forcing them to operate on thinner margins due to rough competition in the market.
This scenario—described metaphorically as 'street vendors selling more bowls of noodles at half price just to keep the crowd coming'—suggests that while output is accelerating slightly, according to the National Bureau of Statistics chief statistician Huo Lihui, this growth is being bought at the cost of profitability.
The country's official manufacturing PMIs first slipped back into contraction in April as trade friction escalated following the US election.
Although a pause in steep US tariff hikes has been extended until November, and recent diplomatic phone calls offer 'glimmers of hope,' the fundamental challenges of weak domestic consumption and geopolitical trade uncertainty continue to weigh heavily on China’s vast manufacturing sector, delaying a full economic recovery.