China now a global handbrake

<p>Kia ora,</p><p>Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news China has become the handbrake on the global economy now, delivering a string of weak economic data.</p><p>And, first up there has been something of a surprise from the Middle Kingdom. <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/770dd9c3e5b541dbb33a70812cf14287" target="_blank"><strong>The Caixin China General Services PMI plunged</strong></a> to a minor contraction in September after a solid-to-good expansion in August. This was the first contraction in services activity since May, and came as the amid the severity of the COVID outbreaks in many areas across the mainland built. It was however a faster retreat than was expected. New orders shrank for the first time in four months; while employment dropped for the ninth month running, with the rate of job shedding the steepest pace since May and backlogs grew for the second month in a row. Export orders expanded slightly, however, following an improvement in some foreign markets.</p><p>The private Caixin result comes after <a href="http://www.stats.gov.cn/tjsj/zxfb/202209/t20220930_1888872.html" target="_blank"><strong>the official services PMI</strong></a> also fell but was recording a small expansion still in September. It has been a while since the Caixin results have reported worse levels of activity than the official surveys.</p><p>China's week-long holiday is ending and it is clear many people were staying at home this year. Travel data reflects that with activity down -36% compared to last year - which itself wasn't a strong event either.</p><p>And residential real estate sales have often been strong in this period too, but <a href="https://www.reuters.com/markets/asia/chinas-holiday-home-sales-fall-377-yy-private-survey-2022-10-08/" target="_blank"><strong>early reports</strong></a> suggest they