China's manufacturing sector contracts for fourth month in row amid economic difficulties
(MENAFN) On Saturday, the National Bureau of Statistics in China announced that the official manufacturing purchasing managers' index (PMI) fell to 49.1 in August, down from 49.4 in July, indicating that factory activity in the country has continued to contract for the fourth consecutive month. This decline was below the median forecast of 49.5 from economists and reflects a persistent underperformance in the sector, with the index remaining below the critical 50-point threshold separating growth from contraction for all but three months since April 2023.
This ongoing contraction suggests that China’s economy, the world’s second-largest, remains in a challenging position this quarter. The country is grappling with a USD17 trillion economy that faces multiple hurdles including a prolonged downturn in the property market, trade tensions with Western nations, and high levels of youth unemployment. Despite the Chinese government's efforts to stimulate the economy through measures such as interest rate cuts, these interventions have yet to significantly improve consumer sentiment. Falling household and business confidence continues to dampen consumption, leaving the manufacturing sector as a crucial component for achieving the government’s GDP growth target of around 5 percent for the year.
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