CHINA’S LATEST OFFICIAL manufacturing purchasing managers index (PMI) points to extremely muted third-quarter GDP growth.
That is not the economic background President Xi Jinping would have chosen to go into the Party Congress, which state media now say will start on October 16, and during which Xi is likely to be reappointed to an unprecedented third term as Party general secretary.
August’s manufacturing PMIs was 49.4, up a tad from 49.0 in July but still stuck in contraction territory (50 is the PMI’s divide between contraction and expansion). The sub-indicators of output and export orders continued to contract. The non-manufacturing PMI is still in expansionary territory but nevertheless eased to 52.6 from 53.8.
State media’s boosterism about the latest data showing recovery seems misplaced.
COVID-19 lockdowns and the extreme heat and drought continue to disrupt the domestic economy. At the same time, soft external demand, as Europe and the United States battle inflation and the threat of recession, adds to the headwinds buffeting China’s economy.