Factory activity in China unexpectedly fell in October amid slowing global demand and strict Covid restrictions affecting production.
The official manufacturing purchasing managers index fell to 49.2 this month from 50.1 in September, the National Bureau of Statistics said on Monday. Bloomberg economists had expected 49.8.
On the non-manufacturing index, which measures activity in the construction and services sectors, a reading below 50 indicates contraction in activity, while anything above indicates expansion.
Raymond Yeung, Chief Economist for Australia and New Zealand Banking Group China, said, "Today's data suggests it is too early to bet on China's economic recovery, although recent third-quarter economic data has performed better than expected. Real estate and falling exports are driving China's growth momentum," he said.
NBS analyst Zhao Qinghe said in a statement that the decline in PMI in October was due to the epidemics, adding that "further stabilization of fundamentals is needed for recovery."
China's 10-year government bond yield continued its decline after the data was released, falling 3 basis points to 2.64 percent, the lowest level since September 9.
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