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China business sentiment worsens as demand falls

A worker polishes steel coils at a factory of Dongbei Special Steel Group in Dalian, China.
China Daily | Reuters
A worker polishes steel coils at a factory of Dongbei Special Steel Group in Dalian, China.

Business sentiment in China worsened in November as companies saw a slump in demand, a survey showed Thursday.

The MNI China Business Sentiment Indicator fell to 49.9 from 55.5 in October, slipping below the 50 mark that separates expansion from contraction, said MNI Indicators, which compiles the survey.

The last time the index fell below 50 was in July, when the index drops to 48.8.

The outlook for many companies remained gloomy, with the Expectations Indicator falling to 51.2 in November from 58.4 in October.

The new orders component fell by 6.6 percent, while production tumbled by 4.2 percent.

The survey is a monthly poll of Chinese executives at manufacturing and service sector companies that are listed on either the Shanghai or Shenzen stock exchanges.

To be sure, there were some positives in the survey. Respondents noted that the interest rates they paid on their borrowings fell and credit availability improved.

Companies were still hurting as the prices they received for their products fell by 9.9 percent, the lowest level since 2008.