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The situation in China's industry continues to deteriorate: Disappointing indicator from Caixin signals economic contraction.
According to a report by FAZ.net, the situation in China's industry has deteriorated again. After the sentiment indicator published by the government had already fallen below a critical level, a similar indicator from the business magazine “Caixin” caused bitter disappointment. The “Caixin” index fell by 1.1 points to 49.5 points in October, while analysts had expected an increase to 50.8 points. A value below 50 points indicates a contraction in the Chinese economy. The two indicators, both the government and the "Caixin" index, are highly dependent on China's external economic situation, as the country exports a lot. In the …
The situation in China's industry continues to deteriorate: Disappointing indicator from Caixin signals economic contraction.
According to a report by FAZ.net, the situation in China's industry has deteriorated again. After the sentiment indicator published by the government had already fallen below a critical level, a similar indicator from the business magazine “Caixin” caused bitter disappointment. The “Caixin” index fell by 1.1 points to 49.5 points in October, while analysts had expected an increase to 50.8 points. A value below 50 points indicates a contraction in the Chinese economy.
The two indicators, both the government and the "Caixin" index, are highly dependent on China's external economic situation, as the country exports a lot. In the service sector, which is more focused on the domestic market, the mood has also deteriorated according to both indicators, but is still just within expansion territory.
The Chinese government has recently taken numerous measures to stimulate the weak economy. In particular, attempts are being made to stabilize the struggling real estate market, as this makes up a significant part of the economy. There were signs of recovery as economic growth in the third quarter came in better than expected, rising 4.9 percent year-on-year. However, the declining purchasing managers' indices show that companies remain unsettled.
The negative developments in Chinese industry could have an impact on the market and the financial sector. A contraction of the Chinese economy could lead to a decline in exports and thus have a negative impact on export-dependent industries. Companies directly or indirectly linked to China could also be affected. Investors could scale back their investments due to the uncertain economic development in China. It remains to be seen how the Chinese government will continue to combat the weak economy and whether the situation in industry will improve.
Read the source article at www.faz.net