China’s official purchasing managers’ index (PMI) fell to 50.2 in October, from 50.8 in September, indicating that the manufacturing sector hardly expanded in the period, amid rising trade tensions with the United States and falling domestic and external demand.
This comes at a time the Chinese currency is inching towards a 7 yuan for a dollar mark, as the central bank fixed the yuan at 6.9646 per US dollar, which may potentially evoke accusations of currency manipulation by the US.
While a falling yuan would offset US tariffs by making exports more competitive, it could also bring down asset prices and result in the flight of capital out of the country.
The growth of the second largest economy in the world was in the weakest pace since the global financial crisis in its third quarter.
The government has adopted measures such as pumping in tens of billions of dollars into the financial system to boost the economy.