FiscalFusion

China’s factory activity contracted for the eighth straight month in November, according to an official survey on Sunday, underscoring challenges for the country’s economy despite the U.S.-China trade truce; the official manufacturing purchasing managers index rose slightly to 49.2 in November from 49 in October, China’s National Bureau of Statistics said, with a PMI reading below 50 indicating contraction and the result aligning with analyst expectations; a U.S. tariff cut earlier this month may eventually help Chinese exports regain competitiveness in the U.S.

market, but it is too early to know whether exports have regained momentum following the trade truce; U.S. President Donald Trump said tariffs on Chinese goods would be cut after meeting Xi Jinping in South Korea on Oct.

30, raising some optimism for Chinese exports and manufacturing; however, China’s prolonged property market slump and falling home prices continue to hurt consumer confidence, with real estate investments declining and intense domestic price competition — including in the auto industry — further pressuring businesses; economists say more policy support is needed to boost the economy, but “policymakers appear to be delaying further policy support,” wrote Lynn Song, chief economist for Greater China at ING, earlier this month; while authorities previously rolled out measures such as trade-in subsidies for home appliances and electric vehicles, some of these subsidies are being phased out, and analysts expect sales and demand to drop; the fading boost from consumer goods trade-in policies may be weighing on domestic demand for manufactured goods, and “signals on domestic demand have been mixed,” said Zichun Huang, China economist at Capital Economics; Chinese officials have targeted around 5% economic growth for 2025, and the economy expanded 4.8% in the July–September quarter; “This year’s growth target is likely to require minimal additional support to be reached,” Song wrote..