Bankinter | Manufacturing activity falls more than expected in October in China. Manufacturing PMI: 49.0 points versus 49.6 expected and 49.8 previously; Services PMI 50.1 versus 50.0 expected and Composite PMI 50.0 versus 50.6 previously.
Analysis team’s view: Weak figures. Manufacturing activity lost momentum in October and entered contraction territory (<50 points). This is the lowest figure in the last seven months and reflects that the impact of tariffs is not neutral on the economy. As a reference, the tariff imposed by the US on imports from China is 47% (vs. 57% previously). The Chinese economy is experiencing a variety of problems: real estate market, overproduction, deflation, tariffs… showing the need for fiscal measures, which for the moment remain insufficient to stimulate the economy. Therefore, we remain sceptical about considering China as an investment alternative.
