China's manufacturing industry slumped in November as new orders, especially from abroad, tumbled in the face of deepening economic gloom and financial uncertainty.
Indexes released toy based on two surveys of hundreds of business executives across China plumbed record lows, showing how the world's fourth-largest economy is being sucked deeper into the global maelstrom even though it has a relatively insular banking system.
The official purchasing managers' index (PMI) produced by the China Federation of Logistics and Purchasing fell to 38.8 in November from 44.6 in October; the PMI produced for CLSA, an Asia-focused broker, fell to 40.9 from 45.2.
The PMIs are designed to give a timely snapshot of manufacturing. A figure above 50 shows business is expanding; a result below 50 shows deterioration.
"Another grim month for China manufacturing and the first in which the weakness in overseas
demand overtook what, until now, has been mainly a domestic slowdown," said Eric Fishwick, head of economic research at CLSA.
Today's readings were the weakest since the surveys were launched in 2004 and 2005. The weakness was broad-based, with production, new orders and employment all falling sharply.
"November's PMI shows that the Chinese economy is slowing down at an accelerating rate. The signs of economic contraction are more evident," said Zhang Liqun, a government economist who comments on the survey for the logistics federation.
The surveys came out two days after President Hu Jintao said on Saturday that the sustained global economic downturn was threatening China's competitiveness and testing the grip of the Communist Party.
President Hu issued the warning at a meeting of the Politburo, the Party's 25-member elite council, which dwelt on the challenges China faces as export demand slows, forcing companies to shed workers, Xinhua news agency reported.
The slowdown was "clearly reducing external demand and exerting pressure to steadily weaken our country's traditional competitive advantages", President Hu said.
China was not alone in reporting growing economic woes.
Reuters