China's factory activity shrinks again in November, services cool

China's factory activity shrank for an eighth month in November while services cooled, highlighting the dilemma facing policymakers over whether to press ahead with tough structural reforms or roll out more stimulus to lift domestic demand.

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The manufacturing purchasing managers' index rose to 49.2 in November from 49.0 in October, the National Bureau of Statistics' survey showed on Sunday, remaining below the 50-point mark separating growth from contraction. It was in line with analysts' forecast of 49.2 in a Reuters poll.

The data reflects manufacturers' difficulty in sustaining a recovery after COVID-19, compounded by a trade war with the US that has ramped up pressure on businesses.

Output stalled, with the sub-index coming at 50.0. Sub-indexes of new orders and new export orders both improved from October but remained below 50.

Although manufacturing continued to slow in November, "We maintain our view that government may hold off on major policy support until the first quarter next year, since this year's growth target appears broadly achievable," Goldman Sachs economist Yuting Yang said in a research note.

The government's 2025 growth target is around 58.

For decades, China's policymakers have had two reliable levers to juice growth: revving up the nation's huge industrial machine to boost exports when household spending softened, or unleashing state-funded infrastructure projects to drive momentum.