**China's Economy Faces Further Weakening as Government Unveils New Stimulus Measures**

Recent surveys have revealed a continued weakening in China's economy, underlining the urgency for further governmental support as Beijing steps up its stimulus efforts. The Caixin purchasing managers survey indicated that new manufacturing orders plummeted at their quickest rate in two years this September. "Operating conditions in China's manufacturing sector deteriorated in September after improving during August," the report noted, emphasizing lowered hiring and reduced purchasing activity among firms.

In tandem with the Caixin survey, the National Bureau of Statistics also published an official survey indicating a less severe decline but marking the fifth consecutive month of contraction. The purchasing managers index (PMI) slightly improved to 49.8 in September from a six-month low of 49.1 in August, yet remained below the 50-point threshold that denotes expansion. While factory output showed an increase, new orders were on the decline.

The Chinese stock markets responded positively on Monday, driven by a wave of policy measures announced the previous week. These include lower interest rates, reduced down payment requirements for mortgages, and a cut in required bank reserves. The main index for the smaller Shenzhen market soared 8.2%, while the Shanghai Composite index rose by 5.7%. "There is no doubt that the coordinated and emphatic policy stimulus measures announced by Beijing have justifiably invoked optimism," commented Tan Boon Heng from Mizuho Bank in Singapore.

Gabriel Ng of Capital Economics noted that while the stimulus package should bolster activity over the next few months, challenges such as the mismatch between excess product supply and weak demand remain. Additionally, trade measures targeting China, including higher tariffs on electric vehicles and other goods, are also expected to strain the economy further.

Over the weekend, the Chinese government moved forward with the measures introduced last week aimed at supporting the property sector and rejuvenating financial markets. By October 31, banks will be directed to reduce mortgage rates for existing home loans. Major cities like Guangzhou have lifted all home purchase restrictions, with Shanghai and Shenzhen also planning to ease significant buying curbs.

The property sector has been struggling since the government cracked down on excessive borrowing for projects several years ago, with falling housing prices and the necessity to fulfill prepaid but unbuilt apartments placing additional pressure on the economy. This sectoral downturn has had a cascading effect on various other industries linked to a once-booming housing market, including appliance manufacturers and building material producers.

The economic setbacks have hampered China's recovery from the substantial disruptions caused by the COVID-19 pandemic, exacerbating consumer anxieties over potential pay cuts, job losses, and declining asset values. In the last quarter, the economy grew by 4.7%, slightly missing the government's approximate target of 5%.