The Associated Press reports:
The purchasing managers’ index of the National Bureau of Statistics and an industry group, the China of Logistics and Purchasing, fell to 50.2 from September’s 50.8 on a 100-point scale on which numbers above 50 show activity expanding.
The drop was more than expected, the South China Morning Post says, and “might also be exacerbated by the ‘front loading’ behaviour of many Chinese exporters – boosting production and shipments now to fill orders for early next year before the scheduled tariff rate increase.”
A separate SCMP article detailed the government’s reaction to the bad economic news:
The Communist Party’s Politburo, the 25-member supreme policymaking body headed by President Xi Jinping, agreed on Wednesday that there was “growing downward pressure” on the economy with “profound changes” in the external environment
It was the “first time the leadership has showed public concern about China’s slowing economic growth since the trade war broke out with the US in the summer,” SCMP noted.
The Politburo meeting was the subject of the top story on all central state media today (English, Chinese). China watcher Bill Bishop interprets the official messaging from the meeting to mean that “a lot more measures are coming to help the economy and the markets.”
Other trade war and U.S.-China relations related news:
- Artificial intelligence
Develop and control: Xi Jinping urges China to use artificial intelligence in race for tech future / SCMP
“The comments underscored Beijing’s continued ambition for technological dominance despite Washington’s allegations of theft and unfair practices in relation to intellectual property.”
- China concerns in the EU
Exclusive: German firms urged to cut dependence on China / Reuters
“A new strategy paper from Germany’s influential BDI industry federation calls on firms to reduce their dependence on the Chinese market, according to a draft seen by Reuters, in a sign of rising concern over Beijing’s state-driven economic model.”
- Trans-Pacific Partnership goes on without U.S.
Trans-Pacific Partnership to Start in December / FT (paywall)
“Australia on Wednesday became the sixth nation to ratify TPP, crossing the hurdle for the 11-member deal to take effect. The US originally was a member but Donald Trump withdrew from the pact in one of his first moves as president.”
“The deal will cut tariffs on agricultural imports from Canada and Australia to Japan, putting US farmers at a significant disadvantage, and increasing the pressure for Washington to secure similar concessions from Tokyo.”
- Chinese officials rhetoric
Opinion: Can China-U.S. relations step back from the edge? / Bloomberg (porous paywall)
Fu Ying, a former vice minister in China, argues that “The two countries are too closely tied to allow misconceptions to pull them into conflict.”
Trade war has quickened China’s economic liberalization, adviser says / The Straits Times via Caixin
Chinese economist and government adviser Fan Gang says that “China recognizes that it needs more liberalization to become more competitive in the global market,” but argues that “vast interest groups” are holding back reform and urging Beijing to keep protecting local firms.
Chinese and American people will save relations despite trade war and South China Sea threats, says ambassador to US Cui Tiankai / SCMP
- Wang Qishan to make nice with Bloomberg
China to send Wang Qishan to forum organised by Michael Bloomberg for business elites in Singapore / SCMP
- China International Import Expo
China’s import expo to woo world with Pakistani fashion show and matchmaking British firms / SCMP
Opinion: The trade war could well end in November, with Donald Trump and Xi Jinping calling a truce / SCMP
Deng Yuwen acknowledges that it is a “bold prediction,” but says that given the likely trends in economic data and that the standoff is “mainly a war on confidence,” a truce is conceivable.
Taiwan seeks more advanced weapons from US at defence industry conference / SCMP
United States won’t allow force against Taiwan, new US envoy says as Beijing piles on pressure / SCMP
Pentagon official urges Taiwan to boost defence spending in face of possible attack by mainland / SCMP
The official is David Helvey, US principal deputy assistant secretary of defence for Asian and Pacific security affairs.
- Bloomberg hack story
Super Micro tells US lawmakers it found no Chinese spy chips, denying Bloomberg report / SCMP
Read on SupChina: Experts doubt Chinese chip-hacking story
- Natural gas
China’s tariff on US natural gas delays Louisiana LNG project / CNBC
L’Oreal CEO sees no slowdown in China despite US trade tariffs / CNBC
- Geopolitics and power competition
Opinion: The US must avoid a new cold war with China / FT (paywall)
Martin Wolf proposes five principles to manage the emerging rivalry with China: “recognise that China is not ‘ours’ to make or remake”; “realise that China’s political organisation is likely to remain different from the west’s indefinitely”; “focus attention on precise and measurable behaviours that affect others and do so in principled and consistent ways”; “recognise that China is a rival in some ways but also a vital and essential partner”; “understand the value of alliances.”
Top general fears war with China and Russia at the Same Time / Daily Beast
“An exclusive interview with Lt. Gen. Ben Hodges, just-retired commander of the U.S. Army in Europe, who warns that war with China is likely in the next 15 years.”
The nuclear dimension of Chinese military power / CSIS
Previously in SupChina’s trade war coverage: