Reuters
- China's economy has stumbled since coming out of the country's COVID-19 lockdown late last year.
- Factory activity declined in October, while foreign investment tumbled 34% in September.
- Experts say the nation is at risk of a debt-deflation crisis that could produce a "lost decade" for its economy.
Data from September and October show China's economy stumbling further, with factory activity falling and foreign investment seeing a significant decline.
Factory activity dropped through the month of October, with China's manufacturing purchasing managers' index falling to restrictive territory at 49.5. That's a reversal from a slight expansion seen during the month of September, when factory activity clocked in at 50.2.
Meanwhile, foreign direct investment plunged 34% year-over-year in September. according to a recent Financial Times analysis of China's Commerce Ministry data. That's the largest monthly decline ever recorded by the Ministry, marking the fifth month of double-digit drops.
The figures are the latest data points that show how China has failed to jumpstart its economy after the pandemic.
While GDP surged 4.9% last quarter, Beijing has largely struggled since dialing back its zero-COVID policies, and is now balancing a multitude of problems.
Demand has been slow to pick up, putting the economy at risk of deflation. Youth unemployment is soaring, and the nation's heavily indebted property market is in freefall.
Fearing a wobbling economy and a crackdown on foreign business activity, investors have been pulling money from the country's markets and dumping assets at a record pace this year.
China's own wealthy citizen are reportedly turning to an underground network to move their wealth out of the country. And despite market support measures, Chinese stocks have sold off this year, with the CSI 300 Index down 8% from levels in January.
Experts say that the nation could be at risk of a debt-deflation crisis or a lost decade, a period of stagnation similar to the one that slammed Japan's economy in the 1990s.