Chinese Group Reports Manufacturing Slowing

(Associated Press – Joe McDonald)

China’s manufacturing activity contracted sharply in November as a downturn in the world’s fourth-largest economy worsened, raising the threat of politically volatile job losses, according to data reported Monday.

The purchasing managers index, which measures new orders and other factors, fell to 38.8 in November on a 100-point scale where a number below 50 indicates manufacturing activity is shrinking, the China Federation of Logistics and Purchasing said. That was down from November’s 44.6 and the lowest level since the survey started in 2005.

President Hu Jintao told Communist Party leaders in a weekend speech that China is losing its competitive edge and warned that coping with the downturn is “a test of our party’s governing ability,” according to state media. The warning was especially significant because Hu, who is leader of the ruling party, rarely comments publicly on the economy.

China’s manufacturers, which employ tens of millions of workers, have suffered a double blow from weakening demand in the United States and other key export markets and a downturn at home in industries such as real estate and auto sales. Read more here.