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China’s factory activity fell for an eighth straight month in November while activity in services hit a three-year low, showing how persistent weak demand is affecting the country’s economic outlook despite a trade truce with the US.

The manufacturing purchasing managers’ index rose marginally to 49.2 this month, according to official data released on Sunday. A reading below 50 shows a contraction in activity.

Another index tracking non-manufacturing business sectors, including services and construction, fell to 49.5, down from 50.1 last month. It is the first reading below 50 in nearly three years.

The results were driven by seasonal factors and the fading effect of a boost in consumption during a week-long public holiday in October, said Huo Lihui, chief statistician of the service industry survey centre of the National Bureau of Statistics.

The data follows efforts by China and the US to curb hostilities over trade, following a meeting last month between presidents Xi Jinping and Donald Trump. The countries agreed to postpone reciprocal export restrictions and China also agreed to resume purchases of American soyabeans, a point of contention between the two sides on trade.

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Chinese policymakers are struggling to rein in overcapacity and excessive competition in some industries — a problem Beijing calls “involution” — while addressing weak consumer confidence and deflationary pressures during a property market downturn and weak jobs market.

Official data showed annual retail sales rose only 2.9 per cent in October, their slowest pace in over a year. Throughout the year the government has tried to increase domestic demand through a trade-in programme that allows households to buy subsidised goods but overall consumption remains subdued.

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