China’s factory activity contracts in October

China's factory activity contracted in October, according to data released by the National Bureau of Statistics. The official manufacturing purchasing managers’ index fell to 49.3, down from 50.1 in September and 49.8 in August.

The PMI, which measures economic activity on a scale from 0 to 100, indicates contraction when readings are below 50. Several subindexes, including new export orders, also showed contraction, with new export orders dropping to 48.7 from 50.0 in September.

Chinese companies have been shipping more goods abroad to find buyers at a time of weakened domestic demand. Trading partners have been complaining about growing trade deficits with China.

The European Union has highlighted what it says is an unsustainable trade deficit with China. The EU has taken measures to rebalance trade, including striking a deal with Beijing to cap the imports of Chinese hybrid vehicles.

China has been exporting more to trading partners in Europe, Southeast Asia, and Latin America. Germany’s President Frank-Walter Steinmeier met Chinese President Xi Jinping and Premier Li Qiang, and Li told Steinmeier that China is willing to import more high-quality products from Germany.