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China's manufacturing contracts for third straight month

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China's manufacturing contracts for third straight month

The latest figure on China's manufacturing sector shows ongoing "sluggish" economic activity, Australian bank ANZ said in a statement.

The weak data is set to put further pressure on Beijing for more stimulus measures in coming months.

The official manufacturing purchasing managers' index came in at 49.8, the same pace as September, although any reading below 50 implies that the sector is shrinking. Anything below 50 indicates a contraction, and this is the third month in a row this has happened.

"While the PMI has stabilised, it is too early to confirm a bottoming out", economists at ANZ said in a note.

Major Chinese construction machinery maker Sany Heavy Industry said on Friday it swung to a loss in the third quarter, affected by a glut of unsold equipment.

China's manufacturing contracts for third straight month

In official data, new manufacturing orders rose 0.1 percentage point to 52.2, but new export orders fell to a two-year low. "The index of new orders is picking up, which indicates that companies are confident about their future business, and the production and operations of the industry as a whole remained at a high level of performance", said Cai Jin, vice president of China Federation of logistics & Purchasing.

China has already cut interest rates six times since last November to boost its economy, which is forecast this year to grow at its slowest annual pace in a quarter of a century, but more actions may be needed to stimulate growth.

The Chinese government has issued a series of policies aimed at stimulating growth, last week abolishing its official cap on interest rates for savers and announcing further relaxation of monetary policy.

Beijing has also quickened spending on infrastructure and eased curbs on the ailing property sector.

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