China factory, services activities slide to 7-month lows on COVID curbs

By Liangping Gao and Ryan Woo

BEIJING (Reuters) - China's manufacturing and services activities shrank further in November to seven-month lows, official data showed, stung by the country's strict COVID-19 restrictions and rising infections that analysts said will hurt the economy well into 2023.

As the coronavirus has spread in China, Beijing has imposed prolonged lockdowns in several places. The clampdowns have hit production at the world's biggest iPhone factory of Apple Inc in China, and, according to an analyst's estimate, now impact about a quarter of the country's gross domestic product.

The stringent COVID-19 measures also stoked rare street protests across many cities over the weekend.

Against this backdrop, the official manufacturing purchasing managers' index (PMI) came in at 48.0 for November against 49.2 in the previous month, the lowest reading in seven months, according to data released by the National Bureau of Statistics (NBS) on Wednesday. Economists in a Reuters poll had expected a PMI of 49.0.

Separately, the non-manufacturing PMI, which looks at service sector activity, fell to 46.7 from 48.7 in October, also the lowest reading in seven months.

The 50-point mark separates contraction from growth on a monthly basis.

The world's second-largest economy, already suffering from the impact of a property slump and weakening global demand for Chinese goods, is facing added pressure from new COVID-19 cases which hit a record on Nov. 27. Cases have edged lower since then.

"Downside risks continue to grow as the virus situation continues to worsen and will weigh heavily on the economy into 2023," said Sheana Yue, China economist at Capital Economics, in a research note on Wednesday after the PMI data release.