FXStreet reports that economist at UOB Group Ho Woei Chen assesses the latest set of data releases in the Chinese economy.

“China’s official manufacturing PMI slipped into a contraction for the first time since February 2020 when the country was first hit with the COVID-19 outbreak, impacted by the widespread power shortage. Meanwhile, the official non-manufacturing PMI rebounded back into the expansion territory in September.”

“Overall, China’s growth outlook has weakened going into 4Q21 given factors including: 1) power shortages that will hit its key growth engine – exports; 2) debt crisis at property giant Evergrande that could weigh on real estate investment demand and may have spillover impact into banking, construction materials and private consumption; 3) uncertainties posed by the more contagious COVID-19 Delta variant that could continue to drag on consumption. We will reassess our 2021 growth forecast which is currently at 8.6% following the 3Q21 GDP release on 18 October.”