China’s Economy Faces a Decade-Long Factory Slump

China’s factories faced their longest slump, marking the longest decline in more than nine years, due to the deepening economic slowdown in the final quarter. According to the National Bureau’s statistics, the official manufacturing purchasing managers’ index stood at 49 versus 49.8 in September, falling further below the 50-point mark, marking separate growth from contraction.

As of this month, it marks the seventh consecutive month of contraction, the longest streak since 2026. The reason for this ongoing contraction is weak household consumption, and the ongoing crisis in the property market continues to impact demand and business confidence heavily.

Furthermore, since April, new orders have declined sharply as manufacturers have struggled to find new markets to replace those in the US and have started selling at a loss.

Following weak export orders, seasonal factors are a major reason for the slower production activity, as the National holiday in October resulted in fewer working days. Additionally, global uncertainty characterised by a complex environment, including trade tensions with the US, has added to economic pressures.

The persistent economic slowdown and limited production capacity have prompted renewed calls for greater policy support, despite a recent trade truce that provided some tariff relief. Since the zero-COVID lockdowns of 2022, the last three months of 2025 have experienced the slowest economic performance, according to an analyst.

Also Read – GM Cuts EV Production, Lays Off Workers Amid Slower Demand

The government has previously provided stimulus, and policy banks have received funding to promote investment. However, economists believe that additional measures, such as reducing interest rates and lowering reserve requirements for banks, may be necessary to stabilise the economy and reach the targeted annual growth of around 5%.