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China's manufacturing contracts again as trade uncertainty lingers


CHINA's manufacturing purchasing managers' index fell to 49.3, according to data released by the National Bureau of Statistics, reports Bloomberg.

That's worse than the 49.8 forecast in a Bloomberg survey of economists. The non-manufacturing gauge was 52.8, lower than forecast but above the 50 level that divides expansion from contraction.

After a bruising third quarter, the chances for stabilisation in China's manufacturing sector hang on the success of months of government stimulus efforts and a confidence boost from a partial trade deal with the US slated for November.

While the timing of that meeting is now in question following Chile's cancellation of a regional leaders' summit, both sides appear committed to easing tensions.

"The China-US trade war remains the main factor dragging on industrial production, while the long holiday break in the month also contributed to the decline," said ABCI Securities economist Yao Shaohua in Hong Kong.

"Monetary policy doesn't have much room for easing and fiscal policy has been doing a lot. Whether production can improve in the future still depends on how the trade talks go," he said.

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