Factory output in China falls yet again

Summary

Marketplace Morning Report — "Factory output in China falls yet again"

Host: William Lee Adams (Marketplace, BBC World Service)
Date: December 1, 2025
Episode Focus:
An exploration of concerning new data from China’s manufacturing sector, suggesting protracted economic weakness, plus brief updates on major global business stories.

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Episode Overview

This episode centers on troubling economic signals from China, where factory output has contracted for an eighth consecutive month—a key indicator for the world’s second-largest economy. The discussion, featuring BBC’s Nick Marsh, investigates both domestic and external factors behind China’s industrial slump, then pivots to a global roundup including a massive data breach in South Korea, turbulence in the crypto market, and severe drought in Iran.

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Key Discussion Points

1. China’s Persistent Manufacturing Slump

(01:14 — 04:08)

• Factory Output Contraction:

  • Recent data (both government and reputable private surveys) show Chinese manufacturing activity—the Purchasing Managers Index (PMI)—declined again in November, marking eight straight months of contraction.
  • The private survey, focused more on smaller firms and exports, reports even worse numbers than official figures.

• Economic Implications:

  • Manufacturing is pivotal for China; continued declines signal trouble for both the domestic economy and global supply chains.

• Notable Quotes:

  • "Factories in China have long been an engine of economic growth, so it’s rather worrying for leaders in Beijing that a new survey shows activity unexpectedly contracted in November." — William Lee Adams [01:19]
  • "By both metrics, William, things are looking quite sluggish in the Chinese economy." — Nick Marsh [02:34]

2. Causes Behind the Downturn: Trade Wars and Domestic Demand

(02:48 — 04:08)

• External Factors:

  • The US-China trade war has hurt exports to the US; China’s pivot to Europe and Southeast Asia hasn’t compensated for losses.
  • Despite strong supply chains, external demand alone isn’t enough to drive recovery.

• Domestic Troubles:

  • Lackluster domestic demand and a severe housing crisis have left consumers materially poorer.
  • Goods gluts and government-led price wars further exacerbate weak internal spending.

• Notable Quotes:

  • "The real concern is going to be the domestic. The data shows this... demand is too low, people aren’t spending enough. Partly that’s down to a big housing crisis." — Nick Marsh [03:19]
  • "You’ve got the domestic demand problem, and then you’ve got this annoying external circumstances of the trade war." — Nick Marsh [03:54]

3. Global Business Briefs

(04:09 — 05:23)

• South Korea’s Coupang: A massive data breach may have exposed nearly 34 million customer accounts.
• Bitcoin Volatility: Bitcoin plunged 6% in a day, ending November down over 16% as the broader crypto market reels.
• Airbus Planes Grounded Briefly: Over 6,000 planes were checked after concerns that solar radiation could disrupt computers, with under 100 still awaiting a fix.
• Greece’s Livestock Disease: An outbreak is leading to the culling of hundreds of thousands of sheep and goats, threatening feta cheese production and exports.

4. Iran’s Water Crisis and Economic Stress

(05:23 — 07:48)

• Unprecedented Drought:

  • Tehran and surrounding areas face historically low rainfall and critically depleted reservoirs.
  • The government is closing offices, banks, and even private businesses to conserve water and energy.

• Wider Economic Strains:

  • Businesses already endure rolling blackouts and gas shortages.
  • Drought compounds existing supply and productivity challenges.

• Notable Quotes:

  • "The annual rainfall is something like 40% below the normal long–term average... many dams that supply Tehran have run out of water." — Baring Tajdan [06:12]
  • "One solution that has been floated frankly for many decades is to take capital out of Tehran, move it to another city. But... there isn’t a perfect candidate." — Baring Tajdan [07:12]
  • "It’s been a pipe dream for many government. It has never materialized, not just because of the cost, but because there isn’t a perfect candidate.” — Baring Tajdan [07:37]

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Memorable Moments & Quotes

• On China’s economic engine:
  "Factories in China have long been an engine of economic growth, so it’s rather worrying...that a new survey shows activity unexpectedly contracted in November." — William Lee Adams [01:19]
• On persistent problems:
  "Things are looking quite sluggish in the Chinese economy." — Nick Marsh [02:34]
• Drought in Iran:
  "The government has taken measures such as shutting down the government offices, the banks and even private sector in order to reduce the consumption of water, electricity, and gas." — Baring Tajdan [06:34]

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Key Timestamps

• 01:14 – Start of China manufacturing segment
• 01:40 – Nick Marsh introduces latest data
• 02:48 – Analysis of trade war impact and domestic factors
• 04:09 – Global business briefs: Coupang, Bitcoin, Airbus, Greece
• 05:23 – Iran’s drought and infrastructure crisis
• 07:46 – End of Iran segment

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Summary

In less than 10 minutes, this Marketplace episode provides a sharp look at China’s ongoing industrial woes, framing them as both a domestic consumption and global trade issue, before swiftly surveying major economic headlines across South Korea, Europe, and Iran. Expert commentary reveals the interconnectedness—and vulnerabilities—of today’s global markets.

Transcript

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[William Lee Adams]

Factory output in China falls for an eighth straight month Live from the uk, this is the Marketplace Morning Report from the BBC World Service. I'm William Lee Adams. Good morning. Factories in China have long been an engine of economic growth, so it's rather worrying for leaders in Beijing that a new survey shows activity unexpectedly contracted in November. It's the eighth straight month production has shrunk. The BBC's Nick Marsh can tell us more. Hello, Nick.

[Nick Marsh]

William hello.

[William Lee Adams]

So you've been looking at this new data. What's it telling us about the world's second biggest economy?

[Nick Marsh]

Okay, so this is the data that we get every month out of China on its manufacturing activity, its factory output. It's called the Purchasing Managers Index, and it's a good way of seeing how much China is producing and selling, therefore what the state of China's economy is like overall. Because as we know, manufacturing is such an important part of the Chinese economy. Now yesterday we got the official figures from the government that showed a decline for the eighth month in a row. And then this morning we got figures from a private survey, very reputable. These figures are actually even worse than the official ones yesterday. And what's going to be even more worrying for the policymakers in Beijing is that this survey tends to look at smaller firms, it looks at export more, and it kind of looks at the sort of on the ground situation a bit more closely. By both metrics, William, things are looking quite sluggish in the Chinese economy.

[William Lee Adams]

To what extent does this have to do with the trade war with the us?

[Nick Marsh]

Some of it is, not all of it is. So exports to the US have declined because of trade tension, trade war, whatever you want to call it. There has been a pivot to exporting to other markets like Europe, like Southeast Asia, that hasn't quite made up for the shortfall. The truth is overall, China's pretty resilient when it comes to exports because it's got the best supply chains, it can make things the quickest and at the lowest cost. I think the real concern is going to be the domestic. The data shows this because even if you look at the non manufacturing stats, things like services and construction, you see a slump. The problem that this whole picture is suggesting is that demand is too low, people aren't spending enough. Partly that's down to a big housing crisis. For the last few years, lots of people's money's tied up in housing stock. So people are materially poorer. And in some cases you've just got a cheap glut of goods. There's price wars that government policy sometimes encourages. So you've got the domestic demand problem and then you've got this annoying external circumstances of the trade war, which at the moment is looking like it's relatively calm. But we just don't know how that's going to change and how that's going to affect next month's figures.

[William Lee Adams]

Nick, thanks for joining us on Marketplace.

[Nick Marsh]

My pleasure.

[William Lee Adams]

Okay, let's do the numbers. Coupang. South Korea's largest online retailer has apologized for a massive data breach potentially involving nearly 34 million local customer accounts. And Bitcoin slid as much as 6%, falling below 80%. The original cryptocurrency shed 16.7% of its value in November amid a wide ranging crypto sell off. Thousands of planes made by the European aviation giant Airbus are returning to normal service after being briefly grounded following a warning that solar radiation could interfere with onboard computers. About 6,000 planes were potentially affected. In an update this morning, Airbus said fewer than 100 still needed to be modified with a software or computer update. And in Greece, hundreds of thousands of sheep and goats. Goats are being culled due to the outbreak of an infectious disease. It may affect production and exports of the country's famous feta cheese. Iran, especially its capital Tehran, is facing an unprecedented drought. With rainfall at record lows and reservoirs nearly empty. Officials are pleading with citizens to conserve water. Bearing Tajdan from the BBC's Persian Service has more high bering.

[Baring Tajdan]

Hi.

[William Lee Adams]

So what are the economic consequences of this water shortage on Tehran?

[Baring Tajdan]

So if you look at businesses in Iran, they have been facing a perfect storm before getting to water. We have had daily blackouts in many cities for something like a year now because of the shortages in electricity generation, especially at peak times. We also have had natural gas shortages. And because of that, you know, like large businesses, manufacturing sector, they have had their gas and their electricity cut off in order to balance the supply and demand. So on top of all of these, we have had this five years of consecutive drought in Iran. The annual rainfall is something like 40% below the normal long term average. And and because of that, basically many dams that supply Tehran or other major cities have run out of water. And again, in order to reduce demand, the government has taken measures such as shutting down the government offices, the banks and even private sector in order to reduce the consumption of water, electricity and gas.

[William Lee Adams]

And one solution that's been floated is to move Tehran. Now moving a city of 10 million people sounds pretty expensive, doesn't it?

[Baring Tajdan]

Yes, it does. It's moving the capital because Tehran is the political capital, the business capital of Iran and it cannot sustain the number of people that live in Tehran and cities and towns close to it and commute every day. So one solution that has been taught it frankly for many decades is to take capital out of Tehran, move it to another city. But one problem is which city, because there is no major candidate that doesn't have the same problems, pollution and lack of water resources and has good transport links, etc. Etc. So it's been a pipe dream for many government. It has never materialized, not just because of the cost, but because there isn't a perfect candidate.

[William Lee Adams]

Baring, thanks for joining us on Marketplace.

[Baring Tajdan]

Thank you.

[William Lee Adams]

In the UK I'm William Lee Adams with the Marketplace Morning Report from the BBC World Service.

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