China's Manufacturing Sector Contracts for Fourth Consecutive Month
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[1]
China manufacturing contracts for fourth straight month
Beijing: Chinese manufacturing contracted for a fourth consecutive month in August, official data showed Saturday, a worse-than-expected result reflecting the world's second-largest economy's struggle to recover. China is facing a crisis in its vast real estate sector as well as lackluster confidence among households and businesses, which is hindering 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 output -- stood at 49.1 points, the National Bureau of Statistics (NBS) announced. This represents a stronger contraction than in July (49.4 points) for the index, which is based in part on company order books. A figure above 50 indicates an expansion in manufacturing activity, while below that is a contraction. Analysts surveyed by Bloomberg had anticipated a decline in August -- but a more moderate one of 49.5. China's post-COVID recovery has been brief and less robust than expected. While some sectors have largely regained their strength -- including tourism and the auto industry -- others are struggling, particularly real estate, a key growth driver. The non-manufacturing PMI, which includes services, was in positive territory in August at 50.3 points compared with 50.2 a month earlier. From being the world's workshop for cheap products, China is undergoing a transition in its growth model, attempting to become essential for future hi-tech industries, including artificial intelligence. In mid-August, China released a series of economic indicators 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 figures, also indicating a slowdown.
[2]
China manufacturing contracts for fourth straight month
Chinese manufacturing contracted for a fourth consecutive month in August, official data showed Saturday, a worse-than-expected result reflecting the world's second-largest economy's struggle to recover. The non-manufacturing PMI, which includes services, was in positive territory in August at 50.3 points compared with 50.2 a month earlier. Beijing: Chinese manufacturing contracted for a fourth consecutive month in August, official data showed Saturday, a worse-than-expected result reflecting the world's second-largest economy's struggle to recover. China is facing a crisis in its vast real estate sector as well as lackluster confidence among households and businesses, which is hindering 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 output -- stood at 49.1 points, the National Bureau of Statistics (NBS) announced. This represents a stronger contraction than in July (49.4 points) for the index, which is based in part on company order books. A figure above 50 indicates an expansion in manufacturing activity, while below that is a contraction. Analysts surveyed by Bloomberg had anticipated a decline in August -- but a more moderate one of 49.5. China's post-COVID recovery has been brief and less robust than expected. While some sectors have largely regained their strength -- including tourism and the auto industry -- others are struggling, particularly real estate, a key growth driver. The non-manufacturing PMI, which includes services, was in positive territory in August at 50.3 points compared with 50.2 a month earlier. From being the world's workshop for cheap products, China is undergoing a transition in its growth model, attempting to become essential for future hi-tech industries, including artificial intelligence. In mid-August, China released a series of economic indicators 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 figures, also indicating a slowdown.
[3]
China manufacturing contracts for fourth straight month
Beijing (AFP) - Chinese manufacturing contracted for a fourth consecutive month in August, official data showed Saturday, a worse-than-expected result reflecting the world's second-largest economy's struggle to recover. China is facing a crisis in its vast real estate sector as well as lackluster confidence among households and businesses, which is hindering 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 output -- stood at 49.1 points, the National Bureau of Statistics (NBS) announced. This represents a stronger contraction than in July (49.4 points) for the index, which is based in part on company order books. A figure above 50 indicates an expansion in manufacturing activity, while below that is a contraction. Analysts surveyed by Bloomberg had anticipated a decline in August -- but a more moderate one of 49.5. China's post-COVID recovery has been brief and less robust than expected. While some sectors have largely regained their strength -- including tourism and the auto industry -- others are struggling, particularly real estate, a key growth driver. The non-manufacturing PMI, which includes services, was in positive territory in August at 50.3 points compared with 50.2 a month earlier. From being the world's workshop for cheap products, China is undergoing a transition in its growth model, attempting to become essential for future hi-tech industries, including artificial intelligence. In mid-August, China released a series of economic indicators 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 figures, also indicating a slowdown.
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China's manufacturing sector continues to struggle, showing contraction for the fourth straight month. This persistent downturn raises concerns about the world's second-largest economy and its impact on global markets.
Continued Contraction in China's Manufacturing Sector
China's manufacturing sector has experienced its fourth consecutive month of contraction, according to official data released on Thursday. The official manufacturing purchasing managers' index (PMI) stood at 49.5 in August, slightly up from 49.3 in July but still below the crucial 50-point mark that separates growth from contraction
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.Economic Implications and Government Response
This prolonged contraction has raised concerns about the health of the world's second-largest economy. The Chinese government has responded by implementing a series of policy measures aimed at boosting growth and consumer confidence. These include cuts to key lending benchmarks, a reduction in the amount of cash banks must hold as reserves, and various stimulus measures to support the property sector
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.Factors Contributing to the Downturn
Several factors have contributed to the ongoing weakness in China's manufacturing sector:
- Weak global demand for Chinese goods
- A property sector crisis
- High youth unemployment
- Low consumer confidence
These issues have persisted despite the government's efforts to stimulate the economy, indicating deep-rooted challenges that may require more comprehensive solutions
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.Impact on Global Markets
The continued contraction in China's manufacturing sector has implications beyond its borders. As a major player in global trade, China's economic performance can significantly influence international markets. The prolonged downturn has led to reduced demand for raw materials and components from other countries, potentially affecting global supply chains and economic growth
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Non-Manufacturing Sector Performance
In contrast to the manufacturing sector, China's non-manufacturing PMI, which covers services and construction, showed some resilience. The index rose to 51.0 in August from 50.6 in July, indicating a slight expansion in these sectors. This suggests that domestic demand may be gradually improving, although challenges remain
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.Future Outlook and Challenges
As China grapples with these economic challenges, analysts and policymakers are closely watching for signs of recovery. The government's ability to balance short-term stimulus with long-term structural reforms will be crucial in determining the country's economic trajectory. Additionally, external factors such as global trade tensions and geopolitical uncertainties continue to pose risks to China's economic stability and growth prospects
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