China's factory activity shrinks for second straight month
China's manufacturing sector contracted for the second consecutive month in August, though the decline was slightly less severe than market forecasts. The government is under pressure to implement fiscal stimulus to combat slowing growth and weak domestic demand.
Why it matters
As the world's second-largest economy, China's manufacturing health significantly impacts global supply chains and international market stability.
China's manufacturing activity in August shrank for a second straight month, though by less than market estimates, keeping the pressure on Beijing to support the economy as growth loses momentum.
The official purchasing managers' index reading came in at 49.8, compared with 49.2 in July , National Bureau of Statistics data showed Monday , better than Reuters-polled economists' forecast of 49.6.
China's economy has come under mounting strain, with growth slowing to 4.3% in the second quarter , the weakest pace since late 2022, as soft domestic demand and a prolonged property slump continue to weigh on activity.
The economic malaise deepened further in the second half of this year, as consumer spending stalled, urban investment contracted at a faster pace, and unemployment ticked higher.
Retail sales and industrial output both slowed in July , while growth in industrial profits cooled to its weakest pace this year.
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