China factory activity unexpectedly shrinks in Oct, dents recovery momentum

China’s manufacturing activity shrank unexpectedly in October, underscoring the daunting task policymakers face as they try to revive economic growth heading into year-end and 2024 amid multiple challenges at home and abroad.

Recent indicators have shown encouraging signs of stabilization in the world’s second-largest economy, supported by a flurry of policy support, although an ongoing real estate crisis and weak global demand remain major headwinds.

The official purchasing managers’ index (PMI) fell from 50.2 to 49.5 in October, falling back below the 50-point level that marks the contraction due to the expansion, data from the National Bureau of Statistics showed on Tuesday. It missed a forecast of 50.2 and was worse than the most pessimistic forecast of 49.9 by Standard Chartered in a Reuters poll.

The non-manufacturing PMI also fell to 50.6 last year from 51.7 in September, indicating a slowdown in activity in the major services and construction sectors.

“The weak PMI data may reflect some of the weakness in demand linked to the housing market slump and a slowdown in infrastructure spending,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.

China’s popular social media platforms announced on Tuesday that “self-media” accounts with more than 500,000 followers will be asked to display information about their real names, a controversial move that has raised concerns about doxxing and privacy among users.