China's official Purchasing Managers Index (PMI) measures the activity of larger companies, many are state-owned. It has fallen to its lowest point since August of 2012. There was a fall from 49.6 to 49.8 in October, the fourth month the PMI index has been in negative margins.
China is declining to its slowest pace since the global financial crisis. They had a 6.9% GDP growth rate in the third quarter. This is the first time that they have fallen below 7% since 2009, resulting in pressure on Beijing to achieve more pro-growth measures. Because of this, China has pledged to start following a stricter global standard when calculating its data.
Even though there are declines in the current demand of manufacturing, the world's largest online retail festival, China's Singles' Day, is creating some positive feedback for some of the sectors. The official PMI survey announced that there were signs of continuous improvement within China's non-manufacturing economy leading to faster expansion in the services and construction sectors.
Economists at home and abroad have agreed that China needs to take further precautions if they are going to avoid a "hard landing" during the economic slowdown. There is the possibility of more infrastructure spending to come in the next few months. Growth is slower than what is advertised, but the bottom is not falling out. There are many signs of improvement that will withstand the impact of the Stockmarket slowdown.
Since China's economy is struggling in the manufacturing industry, the country is providing the opportunity for other countries to emerge and become successful in this industry. I would love to see more competition in the business world. I say this because instead of only a few countries running the show, other countries will have the option of becoming more developed as well as have the ability enter into new markets.
Caio! Auf Wiedersehen! Nos vemos!