“The market is in urgent need of policies to promote employment and stabilise domestic demand. Beijing should further coordinate fiscal and monetary policies to expand domestic demand and boost incomes of the poorer parts of the population.”
An easing of antivirus curbs in some Chinese cities in the last few days has been met with a mix of relief and worry, as hundreds of millions await an expected shift in policies after widespread social unrest.
Most analysts believe the road to an eventual reopening will be long and bumpy, and warn a further surge in infections this winter could see measures tightened again.
Companies in the Caixin/S&P survey reported the strongest falls in output and new work for six months, and continued to cut staff as confidence in the outlook for the next 12 months fell to an eight-month low.
The rate of job losses was the quickest seen since the survey began in November 2005, pointing to further strains on the labour market.
One bright spot was that export business returned to growth from contraction in October, partly due to the relaxation of international travel rules.
Companies also continued to raise their prices, while input cost inflation softened.
Beijing has softened its stance on the stringent virus measures after widespread protests with some eases in virus policies on testing requirements and quarantine rules in a marked shift in several places in Chinese cities.
As hopes for China’s reopening are growing, economists and analysts say Beijing could abandon its zero-Covid approach as early as after the annual parliamentary meeting in March, but the reopening road will be bumpy in the short term.
Caixin/S&P’s composite PMI, which includes both manufacturing and services activity, fell to 47 in November from 48.3 the previous month, driven by falls in both manufacturing and service sector output.
The Caixin PMI is compiled by S&P Global from responses to questions sent to purchasing managers in China.