**China’s economy in trouble as manufacturing and service industry shrink**
A recent report by the Chinese Communist Party has revealed concerning figures about the state of China’s economy. The data shows that China’s manufacturing industry has been below the boom-bust line for two consecutive months, with the service industry also shrinking. This has led to a more pessimistic consumer sentiment and a vicious cycle in the economy.
The National Bureau of Statistics of the Communist Party of China reported that China’s official manufacturing purchasing managers’ index (PMI) fell to 49.4 in November from 49.5 in October, marking the second consecutive month below the 50-point line. The service sector also experienced a decline, with the PMI shrinking to 49.3 in November from 50.1 in October, the first time the index has shrunk this year.
Consumer spending has also been affected, with the housing crisis and high youth unemployment dampening household consumption demand. The real estate industry, which accounts for a quarter of China’s economy, has fallen into a long-term downturn, further inhibiting consumer confidence and households’ willingness to spend.
Economists have expressed concern about the findings, with Louise Loo, chief China economist at Oxford Economics in Singapore, suggesting that Chinese officials may need to prepare for more stimulus measures in light of the data. However, recent policy support measures introduced by the CCP have had little effect, putting pressure on Beijing to introduce additional stimulus measures.
The economic woes in China have also caused concern among foreign investors. The Wall Street Journal reported that geopolitical risks are now the first factor that investors consider, deterring many from investing in China. The recent shutdown of foreign consulting and due diligence firms by the Chinese government has also raised concerns about the transparency of investment in the country.
The outflows of foreign funds from China’s stock market and the declining MSCI China Index show that international investors are wary of the economic situation in China. Market strategists have indicated that most hedge funds and active managers who have sold off Chinese stocks are unlikely to return until China’s economic growth prospects and U.S.-China relations improve significantly.
The troubling state of China’s economy and the potential for continued geopolitical complexity in 2024 have raised concerns about the future of investment in the country. As the economic recovery remains challenging, both domestic and foreign investors are faced with a risky environment in China.
**Voice of Hope’s Invitation**
In the face of these challenges, Voice of Hope continues to provide comprehensive reports to convey the truth and inject hope into China. We invite you to work together with us to support our efforts in maintaining large-scale broadcasts to China.
Editor in charge: Lin Li
This article was edited and produced by Voice of Hope. When reprinting, please indicate Voice of Hope and include the original title and link.