China’s factory activity contracts unexpectedly in July

PTI | | Updated on: Jul 31, 2022
Representative image

Representative image | Photo Credit: ALY SONG

The index of production tumbled to 49.8

Chinese manufacturing's recovery from anti-virus shutdowns faltered in July as activity sank, a survey showed on Sunday, adding to pressure on the struggling economy in a politically sensitive year when President Xi Jinping is expected to try to extend his time in power.

Factory activity was depressed by weak global demand and anti-virus controls that are weighing on domestic consumer spending, according to the national statistics agency and an official industry group, the China Federation of Logistics and Purchasing.

A monthly purchasing managers' index issued by the Federation and the National Bureau of Statistics retreated to 49 from 50.2 in June on a 100-point scale on which numbers below 50 indicate activity declining. Sub-measures of new orders, exports and employment declined.

The slowdown, which raises the risk of politically volatile job losses, adds to challenges for Beijing ahead of a ruling party meeting in October or November when Xi is expected to try to break with tradition and award himself a third five-year term as party leader.

The port of Shanghai says activity is back to normal, but factories and other companies are operating under anti-virus controls that limit their workforces and weigh on production. An index of production tumbled to 49.8 from 52.8 in June. New orders declined 1.9 points to 48.5. New export orders lost 2.1 points to 47.4.

Published on July 31, 2022
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