Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported on an announcement that China’s National Bureau of Statistics made. China’s manufacturing purchasing managers’ index (PMI) in July declined by 1.2 percentage points from the previous month to 49 percent, falling below the growth line. The Bureau indicated that many factors influence the decline of the manufacturing PMI. For example, it is affected by traditional production off-season, insufficient market demand, and low prosperity of high-energy-consuming industries. Industries like textiles, petroleum, coal and other fuel processing, ferrous metal smelting and rolling processing have continued to be in the contraction range. This was one of the main factors for the decline of PMI. Both manufacturing activities and demand in the manufacturing sector have slowed down. Raw material procurement activities have also tightened accordingly. The purchasing volume index and the import index both decreased by more than two percentage points from the previous month. The international situation has become more complex and severe, and the market demand is under pressure. The new orders index and the index of new export orders both dropped significantly. The manufacturing PMI now is below 50, indicating that China’s economic recovery remains shaky. Challenges to China’s GDP growth in the third quarter may be bigger than earlier expected.
(1) Lianhe Zaobao, August 1, 2022
(2) China’s National Bureau of Statistics, July 31, 2022