September witnessed a sixth straight month of deterioration in China's manufacturing activity. The purchasing manager's index (PMI), which was reported by the National Bureau of Statistics (NBS), increased marginally from 49.1 in August to 49.8

Although it exceeded the consensus prediction of 49.5 in a Reuters survey and is the highest reading in five months, the number is still below the crucial 50-point threshold that separates expansion from contraction.

These figures, together with lower results from a Caixin poll conducted among the private sector, demonstrate the ongoing difficulties facing China’s consumer and manufacturing industries. Although the latest PMI data indicate some encouraging trends in manufacturing, economists stress that they remain concerned about the state of the economy as a whole.

Pinpoint Asset Management’s chief economist, Zhiwei Zhang, pointed out that while recent growth-stimulating initiatives are important, they might not have a major effect on macroeconomic conditions. Zhang emphasised that tough fiscal measures are necessary to solve persistent issues.

The NBS stated that despite the government’s stimulus efforts last week, the decline in industrial activity points to structural problems facing the industry. Analysts are watching closely to see if these actions result in a significant rebound in the months to come.