Source: AFP
Chinese manufacturing contracted for a fourth straight month in August, official data showed on Saturday, a worse-than-expected result that reflected the world’s second-largest economy’s struggle to recover.
China is facing a crisis in its massive real estate sector, as well as a lack of confidence among households and businesses, which is holding back consumption, while geopolitical tensions with Washington and the European Union threaten foreign trade.
In August, the Purchasing Managers’ Index (PMI) — a key barometer of industrial production — stood at 49.1, the National Bureau of Statistics (NBS) said.
This represents a stronger contraction than in July (49.4 points) for the index, which is based in part on company order books.
A number above 50 indicates an expansion in manufacturing activity, while below that a contraction.
Read also
US Fed’s preferred inflation gauge remains steady as rate cut looms
Analysts polled by Bloomberg had forecast a drop in August — but a more modest one from 49.5.
China’s recovery from COVID-19 has been short-lived and less robust than expected.
While some sectors have largely regained strength — including tourism and the auto industry — others are struggling, particularly real estate, a key driver of growth.
The non-manufacturing PMI, which includes services, was in positive territory in August at 50.3 from 50.2 a month earlier.
From being the global laboratory of cheap products, China is in a transition in its growth model, attempting to become indispensable for future high-tech industries, including artificial intelligence.
In mid-August, China released a series of economic indicators that were deemed disappointing despite recent government measures aimed at trying to boost growth.
In July, demand for bank loans contracted for the first time in nearly 20 years, according to official data, also suggesting a slowdown.
Source: AFP
