Growth in China’s manufacturing sector slowed in November, suggesting the world’s second-largest economy is still losing momentum and adding pressure on authorities to ramp up stimulus measures after unexpectedly cutting interest rates last month.
After saying for months that China does not need any big economic stimulus, the People’s Bank of China (PBOC) surprised financial markets by lowering rates on Nov. 21 to shore up growth. Analysts see more moves in coming months if the economy continues to stumble. [ID:nL3N0TB3VW]
“The PBOC’s rate cut appears to have failed to improve sentiment, and we see little improvement in activity indicators in November,” ANZ said in a research note. “In order to maintain growth for the whole year at around 7.5 percent (the official target), we believe that Chinese authorities will intensify easing efforts in December to accelerate growth momentum.” The official Purchasing Managers’ Index (PMI) eased to an eight-month low of 50.3 last month, the National Bureau of Statistics said on Monday, still indicating a modest expansion in activity but below forecasts for 50.6 and October’s 50.8.