China's Economic Struggle: Balancing Reforms and Stimulus

China's factory activity contracted for an eighth month in November, while services cooled, posing a challenge for policymakers deciding between structural reforms or escalating stimulus measures. With domestic growth targets nearly manageable for 2025, attention turns to trade pressures and the need for economic transformation.

China's manufacturing sector experienced its eighth consecutive month of contraction in November, as services also saw a decline, presenting a dilemma for policymakers torn between advancing structural reforms or stimulating domestic demand.

The National Bureau of Statistics reported that the manufacturing purchasing managers' index edged up slightly to 49.2 from 49.0 in October, aligning with analyst expectations but still beneath the threshold indicating growth. Businesses are struggling for recovery post-COVID-19, exacerbated by a U.S. trade conflict.

Despite the sluggish growth, Goldman Sachs posits major policy support may be delayed until next year's first quarter. Meanwhile, government initiatives focus on consumption as structural reforms aim to address long-standing economic imbalances.

(With inputs from agencies.)