Chinese factory activity contracts in October

Chinese factory activity contracted in October, with the country’s manufacturing gauge falling below the level that separates growth from contraction. The slowdown adds pressure on Beijing as it seeks to meet its lowest economic growth target in decades.

The official purchasing managers’ index fell to 49.3 from 50.1 in September, according to China’s National Bureau of Statistics. A reading above 50 indicates expansion; one below it indicates contraction.

The statistics bureau attributed part of the decline to a national holiday week early in October, while weaker demand for Chinese exports also weighed on activity. High-tech manufacturing continued to grow, the report said.

Beijing has recently introduced new economic stimulus measures. China is aiming for growth of 4.5 to 5 per cent this year, a target described in the report as the lowest in decades. The figures suggest factory activity weakened, but do not establish whether further support will be introduced.