China's economy is likely to continue to slow down

China's manufacturing activity is likely to continue to decline in November, with weak domestic demand in the economy the main reason despite the easing of the energy shortage, according to Bloomberg.

The official manufacturing managers index is forecast to improve slightly to 49.7 from 49.2 in October when it is released on Tuesday, according to the median estimate in a Bloomberg survey of economists. That would be the third month it stayed below the key 50 mark, indicating a decline in manufacturing.

The non-manufacturing index, which measures activity in the construction and services sectors, is forecast to fall to 51.5 from 52.4 in the previous month.

China's energy shortages, which devastated factory production in September and October, may have eased this month as coal producers ramped up output and inventories rose. However, the housing market crisis shows no sign of ending, and frequent Covid-19 outbreaks continue to hold back consumption.

Economic growth is forecast to slow to 5.3% next year, with some economists seeing growth as low as 4%, according to a Bloomberg survey of medians. Bloomberg Economics forecasts growth at 5.7%, as the government will likely target between 5-6%.

Authorities are trying to contain a sharp downturn in the real estate market, while providing targeted support to areas such as small businesses and green technology. Officials will reveal more clues about the extent of policy easing they plan to deliver during two key political meetings in December of the Politburo and the Central Economic Work Conference.

China will adopt a more proactive macroeconomic policy next year to deal with challenges from the uneven recovery of the global economy and uncertainty in containing the pandemic, Securities Times , run by People's Daily, said in a front-page commentary on Monday.

Authorities have limited the use of monetary and fiscal tools amid the economic downturn this year, thus creating enough space for policy manipulation next year, according to the commentary.

The downturn is being supported by strong export demand, which is likely to remain flat in November, based on the latest shipment figures from South Korea.

Consumption and travel continue to be impacted by the resurgeLikence of new infections and the nation is increasingly determined to stick to its strict Covid Zero strategy.