China's manufacturing faces third consecutive contraction in Dec, calls for policy support intensify
A Chinese national flag flutters near the building of China Securities Regulatory Commission
China's manufacturing sector is anticipated to contract for the third straight month, as per a Reuters poll, reflecting subdued demand for manufactured goods and heightening the clamour for additional policy support.
According to the median forecast of 24 economists surveyed from December 22 to 28, the official purchasing managers' index (PMI) for December is expected to be 49.5, a marginal increase from November's 49.4.
Only three out of the 24 economists surveyed foresee an expansion in factory activity in December. The highest forecast reading is 50.5, underscoring the prevailing headwinds.
The official manufacturing figures for December are scheduled for release on Sunday, providing a comprehensive overview of the sector's performance.
Additionally, the private Caixin factory survey, expected on Tuesday, is projected to show a slowdown to 50.4 from an unexpected expansion reading of 50.7 in November.
This continuous contraction signals the challenges faced by the world's second-largest economy, struggling with a feeble post-pandemic recovery, a property crisis, local government debt risks, and sluggish global growth.
The Chinese government, in response to the economic challenges, has introduced a series of measures to bolster growth.
Despite the central bank's efforts to maintain an accommodative policy to boost confidence and stimulate recovery, new bank lending in China saw a less-than-expected increase in November.
Moody's, the credit rating agency, added to China's economic concerns by issuing a downgrade warning in December. The warning comes as the property market exerts pressure on the economy, compounding existing challenges.
In a parallel development, an interim report on China's 14th five-year plan, published by parliament on Wednesday, emphasised the country's commitment to expanding domestic demand, ensuring a swift economic recovery, and promoting stable growth.
(With inputs from Reuters)
WATCH WION LIVE HERE