China’s factory activity contracted in October, with the official manufacturing purchasing managers’ index (PMI) falling to 49.3 from 50.1 in September, according to data from the National Bureau of Statistics reported by Reuters on Saturday. It was the third contraction in four months and missed the 50.0 forecast in a Reuters poll. A reading below 50 signals contraction. New orders and new export orders both stayed in contraction territory, while production and purchasing activity slipped from expansion into contraction. The non-manufacturing PMI, covering services and construction, also fell, to 49.7 from 50.2. One brighter spot remained: production and new-order readings for railway, shipbuilding, aerospace equipment and computer, communications and electronics manufacturing were all at or above 53.0. For the rest of the world, including Pakistan, a softer Chinese factory sector matters through trade and commodity demand: weaker orders in the world’s largest manufacturer tend to weigh on exporters and on raw-material prices alike. One month does not make a trend, but three contractions in four months point to demand, not supply, as the problem. Sources: Reuters, National Bureau of Statistics (via Nikkei). Written in our own words for information only.