China’s manufacturing sector contracted for a second consecutive month in August, although the pace of decline was milder than analysts had anticipated, keeping pressure on Beijing to roll out further support as economic momentum fades.
The official purchasing managers’ index (PMI) came in at 49.8 for August, up from July’s 49.2, according to data from the National Bureau of Statistics released Monday. The reading was better than the 49.6 forecast from economists polled by Reuters. A PMI reading below 50 indicates contraction in factory activity.
Broader economic strains
China’s economy has been under mounting strain, with growth slowing to 4.3% in the second quarter — the weakest pace since late 2022. Soft domestic demand and a prolonged property slump continue to weigh on activity across sectors.
The malaise has deepened in the second half of the year. Consumer spending has 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.
Exports remain a bright spot
Exports have been one of the few pillars propping up growth this year, cushioning some of the drag from external shocks. A global boom in AI infrastructure spending has lifted demand for Chinese-made tech goods, and outbound shipments have recorded double-digit growth for most of this year.
Policy response expected
Chinese policymakers have pledged to roll out new policy measures in a timely manner and signaled room for further fiscal spending and monetary easing. However, economists said the scale of any upcoming support would likely be limited, leaving investors to gauge how much stimulus Beijing is willing to deploy amid ongoing structural challenges.
Source: www.cnbc.com — https://www.cnbc.com/2026/08/31/china-pmi-august-economy-slowdown.html
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