## China’s Manufacturing Sector Contracts Amid Trade Tensions and Economic Slowdown
Here’s a breakdown of the recent developments in China’s manufacturing sector:
- Manufacturing PMI Falls: China’s official manufacturing Purchasing Managers’ Index (PMI) for July fell to 49.3, below expectations and indicating contraction for the fourth consecutive month.
- Trade Tensions Impact: Ongoing U.S.-China trade tensions and tariffs are contributing to the slowdown. Some manufacturers are shifting production to countries like Vietnam to avoid tariffs.
- 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.
- Sub-Indexes Show Contraction: Key sub-indexes within the PMI, including employment, new orders, and raw materials inventory, also contracted in July.
- Weather and Economic Factors: The decline is attributed to factors like seasonal slowdowns, extreme weather, and efforts to address overcapacity.
- Exports Remain Stable: Despite the slowdown, overall export figures are expected to remain stable in the short term.
- GDP Growth Slows: China’s GDP growth slowed to 5.2% in the second quarter, down from 5.4% in the first quarter.
- Services Sector Also Weakens: The non-manufacturing PMI, measuring activity in services, also declined in July.
- Experts’ Concerns: Economists express concerns about the impact of tariffs on China’s economy from August onwards, with little incentive for businesses to ramp up orders.
- Limited Stimulus: China’s leaders have not signaled plans for substantial new economic stimulus.
For more details, you can read the original article on CNBC: [https://www.cnbc.com/2023/08/03/china-manufacturing-pmi-july-2023.html](https://www.cnbc.com/2023/08/03/china-manufacturing-pmi-july-2023.html)