## China’s Manufacturing Slumps Amid Trade Tensions and Economic Slowdown
Here’s a breakdown of the recent news regarding China’s manufacturing sector:
- **Manufacturing PMI Contracts:** China’s official Manufacturing Purchasing Managers’ Index (PMI) for July fell to 49.3, below expectations and indicating a contraction in manufacturing activity. This marks the fourth consecutive month below the 50-point threshold, signaling contraction.
- **Trade War Impact:** Ongoing U.S.-China trade tensions are a significant factor. Companies are shifting production to countries like Vietnam to avoid tariffs. The current trade truce is set to expire in mid-August, with no extension announced yet.
- **Economic Slowdown:** China’s GDP growth slowed in the second quarter, and the July PMI data suggests a further slowdown in the second half of the year. The non-manufacturing PMI also declined.
- **Weather and Other Factors:** Extreme weather, including heavy rain and heat, has impacted manufacturing. “Anti-involution” efforts to address overcapacity problems are also contributing to the slowdown.
- **Sub-Index Contractions:** Key sub-indexes within the PMI, such as employment, new orders, and raw materials inventory, also contracted in July.
- **Export Stability:** While exports rose in June, the overall economic outlook is concerning. Experts predict the tariff impact on China’s economy will become more apparent from August onwards.
- **Limited Stimulus:** China’s leaders have not signaled plans for substantial new economic stimulus, which could further exacerbate the slowdown.
For more details, you can read the original article on CNBC: [https://www.cnbc.com/2024/08/03/china-manufacturing-pmi-july-2024.html](https://www.cnbc.com/2024/08/03/china-manufacturing-pmi-july-2024.html)