China’s economy is starting to splutter. Growth in the country’s massive manufacturing sector stalled for the first time in more than two years in November.
Data released by the National Bureau of Statistics showed that new orders slowed, piling pressure on Beijing ahead of trade talks between United States President Donald Trump and China’s head of state Xi Jinping this weekend at the Group of 20 summit in Buenos Aires.
The official Purchasing Managers’ Index compiled by the NBS fell to 50 this month, missing market expectations and down from 50.2 in October. It was the weakest reading in 28 months.
Indeed, the 50-point mark is considered neutral territory, indicating no expansion in activity or contraction on a monthly basis.
“Manufacturing is now swerving oh so dangerously close to contraction territory – this will add further fuel to the global slowdown narrative which is taking hold,” Stephen Innes, the head of Asia Pacific trading at OANDA, wrote in a research note.
In a statement accompanying the latest figures, the NBS confirmed that China’s exports and imports faced growing downward pressure stemming from trade frictions.
Even if a peace deal is worked out in Argentina, the data points to a continued weakening of the world’s second-largest economy.
“[The PMI reading] suggests that policy easing is still struggling to put a floor beneath growth,” Julian Evans-Pritchard, an economist with research firm Capital Economics, said in a note.