China’s factory activity plummets amid tough COVID curbs | business and economy

The latest sign of economic strain comes after rare mass protests against Beijing’s “zero-COVID” policy.

China’s factory activity fell for the second straight month in November, underscoring the economic toll of the tough “zero Covid” policy that has fueled rare mass protests in the country.

China’s purchasing managers’ index fell to 48, down from 49.2 in October, data from the National Bureau of Statistics (NBS) showed on Wednesday.

The index – where the 50-point mark separates growth from contraction – is at its lowest level in seven months.

The non-manufacturing PMI, which covers the services sector, fell to 46.7 from 48.7 in October.

Chinese authorities have imposed tough COVID restrictions on cities across the country as nationwide cases hit record highs.

The country’s currently locked-down areas account for more than a quarter of gross domestic product, more than at the peak of Shanghai’s lockdown in April, according to a report by Nomura Holdings Inc. released on Monday.

The latest sign of economic disruption comes after protests against tough COVID-19 measures erupted in major cities including Beijing, Shanghai, Chengdu and Nanjing.

China has stuck to its ultra-tight “zero Covid” strategy of lockdowns, mass testing and border controls, despite rising economic and social costs and efforts by the rest of the world to live with the virus.

“In November, China’s purchasing managers’ index fell, impacted by several factors including the wide and frequent spread of domestic outbreaks and the international environment, which became more complex and severe,” said Zhao Qinghe, senior statistician at the NBS, in a statement.

Zhao said the domestic outbreaks in November caused “a slowdown in manufacturing activity and a drop in product orders,” noting “increased volatility in market expectations.”

China’s economy is expected to miss 3 percent growth in 2022, which would be among its worst performances in decades.

Chinese authorities this month rolled out a raft of measures to support the economy, which is also grappling with a property slump and weaker global demand for Chinese goods.

China’s securities regulator earlier this week lifted a ban on equity refinancing for listed companies, sending shares and bonds of Chinese real estate companies higher.