China's factory activity slides for second straight month
BEIJING: Factory activity in China contracted in August for a second straight month, official data showed on Monday, as soft demand weighs on the world's second-largest economy.
Leaders in Beijing are seeking to maintain pace despite hurdles including trade frictions with Washington and an entrenched property-sector crisis that has spooked consumers.
The manufacturing purchasing managers' index (PMI) came in at 49.8 in August, according to the National Bureau of Statistics, slightly below the 50 mark separating expansion from contraction.
Still, the reading was higher than the 49.5 forecast in a Bloomberg survey of economists, and an improvement on the 49.2 recorded in July.
NBS statistician Huo Lihui said in a statement it showed an "expansion in both production and market demand in the manufacturing sector".
Certain sectors saw "weak market activity", Huo added, including steel production and chemical materials.
The non-manufacturing PMI, which measures activity in other areas including services and construction, came in at 49.0, the data showed. That was unchanged from July but missed the Bloomberg forecast of 49.4.
Huo noted "weak" activity in wholesale, retail and capital market services in August, which were all "below the critical point".
"The rise of commodity prices may have benefited some firms in the upstream manufacturing sector, as both input and output price indexes rose last month," wrote Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. "But this is driven by supply rather than demand," he added.
China's economy has been supported by a historic boom in exports that has shown no sign of stopping in recent months.
It has also been helped by the global artificial intelligence frenzy that has increased demand for its tech products.
With storm clouds building elsewhere, economists argue that Beijing needs to shift towards a model powered more by household consumption than traditional growth drivers, including infrastructure investment and property.
By RSS/AFP
