Beijing: The Chinese government announced on Friday that industrial activity in the country contracted in October, marking the seventh consecutive month of decline.
According to Yemen News Agency, the National Bureau of Statistics in China stated that the official Purchasing Managers’ Index (PMI) for the manufacturing sector fell to 49 points in October, compared to 49.8 points in September, a worse-than-expected drop. A reading below 50 indicates contraction in the sector.
US President Donald Trump announced on Thursday, following a meeting with his Chinese counterpart Xi Jinping in South Korea, that he would reduce tariffs imposed on China due to fentanyl from 20% to 10%, thereby lowering US tariffs on Chinese goods from 57% to 47%.
HSBC economist Taylor Wang stated that the reduction in tariffs on Chinese exports would allow them to “regain more competitiveness in the US market, and we could see some recovery in direct exports to the United States soon.”
But Wei Li, head of multi-asset investment at BNP Paribas Securities Group in China, believes that “despite the progress made in the tariff truce, global uncertainty still casts a shadow over manufacturing confidence,” adding that agreements between Washington and Beijing will likely prevent further deterioration rather than drive a strong recovery.