Manufacturing output shrinks in November

Growth in Chinese manufacturing fell sharply in November as indicated by preliminary data from HSBC’s Purchasing Managers’ Index, The Wall Street Journal reported. November marked a shift from steadily slowing growth to outright contraction, with the PMI rating slipping from 51 to 48. A rating below 50 indicates the sector is contracting. The decline is the largest month-on-month decrease since March 2009. Authorities in Beijing have tried to combat slowing growth with limited tax cuts for small businesses and eased central bank lending policies. This latest decline could push Beijing to more vigorously pursue easing policies, said Tim Condon, ING’s chief economist for Asia. Low-cost export manufacturers have been hit hardest by recent wage inflation and the appreciation of the renminbi, but there are signs that flagging demand in US and Europe is also affecting demand for high-tech goods, such as solar panels.