11:52נובמבר 30, 2021MT Newswires

Commerzbank Still Sees Challenges to China's Economy Despite Some PMI Improvements

Commerzbank said that after a slew of disappointments, China's official PMIs overnight Monday brought in some positive surprise before the end of the year.

The official manufacturing PMI jumped to 50.1 for November, significantly higher than expectations at 49.7 and previous reading of 49.7. In the meantime, the services PMI remained largely unchanged at 52.3, versus 52.4 in October. Chinese officials attributed the improvement to the ease of the power crunch.

While there had been some improvement in official PMIs, the general growth picture didn't change too much, which still pointed to weak demand, wrote the bank in a note to clients. Automobile sales, for instance, were likely to register another negative monthly growth in November, according to preliminary estimates by China Passenger Car Association.

In the meantime, the housing sales in the major cities still saw a drop of about 20%, while the volume seemed to be stabilizing since October. As Chinese authorities stuck to their zero-COVID and financial deleveraging policies, growth prospects remained challenging over the foreseeable future, added Commerzbank.

For the whole year of 2022, the bank predicted growth of about 4.5%, down from about 8.0% this year.