## China’s Manufacturing Activity Contracts: A Look at July’s PMI
China’s manufacturing sector is facing headwinds, according to the latest Purchasing Managers’ Index (PMI). Here’s a breakdown of the key takeaways:
- Manufacturing PMI Misses Expectations: The official manufacturing PMI for July came in at 49.3, below the expected 49.7 and indicating a contraction in activity. This marks the fourth consecutive month below the 50-point threshold.
- Factors Contributing to the Decline: Several factors are at play, including:
- Weather Challenges: Extreme heat and heavy rain in parts of China have disrupted production.
- Trade Tensions: Ongoing trade tensions with the U.S. and shifting orders to countries with lower tariffs, like Vietnam, are impacting the sector.
- Anti-Involution Efforts: Beijing’s efforts to address overcapacity are also contributing to the slowdown.
- Sub-Indexes Show Weakness: Key sub-indexes, such as employment, new orders, and raw materials inventory, also contracted in July.
- Trade Truce Uncertainty: The trade truce between the U.S. and China is set to expire in mid-August, with no extension announced after recent meetings. This uncertainty is causing concern.
- Impact on Exports and GDP: While exports rose in June, GDP growth slowed in the second quarter. 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 stimulus, which could further impact growth.
For more details, you can read the original article on CNBC: [https://www.cnbc.com/2023/08/03/chinas-manufacturing-pmi-misses-expectations-in-july.html](https://www.cnbc.com/2023/08/03/chinas-manufacturing-pmi-misses-expectations-in-july.html)