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As President Donald Trump approaches the one-year anniversary of his second term in office, the FT’s chief economics commentator Martin Wolf, and Nobel prize-winning economist Paul Krugman sit down to discuss the US economy and the state of American democracy. Are American consumers finally feeling the effect of Trump’s tariffs? Is AI to blame for the frozen labour market? Or is the spectre of a weakening democracy and plutocracy to blame for slumping consumer sentiment? In the first of four weekly episodes, Wolf and Krugman unpick the US and world economy, with Krugman explaining why he’s less pessimistic now than he was earlier this year.

Subscribe and listen to this series of The Economics Show on Apple Podcasts, Spotify, Pocket Casts or wherever you listen to podcasts.

Read Martin’s column here.

Subscribe to Paul’s Substack here.

Find Paul’s cultural coda here.

Find Martin’s cultural coda here.

Produced by Mischa Frankl-Duval. Manuela Saragosa is the executive producer. Original music and sound design by Breen Turner.

Read a transcript of this episode on FT.com

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HONG KONG — China’s factory activity contracted for the eighth straight month in November, according to an official survey on Sunday, underscoring challenges for the country’s economy despite the U.S.-China trade truce.

The official manufacturing purchasing managers index rose slightly to 49.2 in November from 49 in October, China’s National Bureau of Statistics said.

The PMI is measured on a scale between 0 and 100, with a reading below 50 indicating contraction. The contraction was in line with analyst expectations.

A U.S. tariff cut earlier this month likely would mean that Chinese exports could gain competitiveness in the U.S. market, but it may be too early to say whether exports have regained momentum following the trade truce.

U.S. President Donald Trump said the U.S. would cut its tariffs on Chinese goods after meeting Chinese leader Xi Jinping in South Korea on Oct. 30, raising some optimism over Chinese exports and manufacturing.

A prolonged slump in China’s property market and falling home prices are still hurting consumer confidence, and real estate investments have been down. Intense price competition domestically in many sectors including the auto industry have also put pressure on many businesses.

More government policy support is required to help boost the economy, economists said.

But “policymakers appear to be delaying further policy support,” Lynn Song, chief economist for Greater China at ING bank, wrote in a note earlier this month.

While Chinese authorities previously rolled out measures such as trade-in subsidies for home appliances and electric vehicles, some of these subsidies are set to be phased out, and sales and demand are likely to drop, analysts said.

The fading boost from the consumer goods trade-in policies may be weighing on domestic demand for manufactured goods and “signals on domestic demand have been mixed,” said Zichun Huang, China economist at Capital Economics, last week.

Chinese officials have set a target of around 5% economic growth for the whole of 2025. The economy expanded 4.8% in the July-September quarter.

“This year’s growth target is likely to require minimal additional support to be reached,” Song wrote.