Chinese manufacturing activities shrink for the fifth month in august
Chinese manufacturing activities shrink for the fifth month in august in August, an official survey shows on Sunday, showing the producer is waiting for further clarity about the trade agreement with the US while domestic requests remain slow.
The Official Purchase Manager Index (PMI) rose to 49.4 in August versus 49.3 in July, remained below 50-signs that separated growth from contraction and loss of median estimates 49.5 in Reuters polls.
The Chinese economy faces exports weakening due to US tariffs, a decline in the property sector, increasing a sense of insecurity of work, local governments that are very indebted and extreme weather. This pressure is threatening to thwart the ambitious growth target of 2025 from Beijing “around 5%,” according to economists.
The non-manufacturing PMI index, which includes services and construction, is expanded at a faster speed, rising to 50.3 from 50.1 in August, according to the National Statistics Bureau (NBS).
NBS composite PMI from manufacturing and non-manufacturing is 50.5 in August, compared to 50.2 in July.
The momentum of the Chinese economy has slowed in the third quarter because of the continuous domestic demand and the cooling property market, said Zhiwei Zhang, the president and head of economist at Pinpoint Asset Management.
“The macro view in the rest of this year is very dependent on how long exports can remain strong and whether fiscal policy will be more supportive in Q4,” Zhang said.
While July exports beat forecasts, profits are supported by low bases and driven by a surge in shipping to Southeast Asia, when Chinese exporters scramble to foster market share there amid fears of losing access to the US, the world’s high market – the encouragement of several producers called “Crazy Rat Racing.”
Earlier this month, the US and China extended their ceasefire for 90 days, locking a 30% levy in Chinese imports and 10% Chinese duty for US items, but uncertainty eroded trust on both Pacific sides.
Profits in the Chinese industry companies fell during the third month in a row in July, official data showed on Wednesday, highlighting how businesses also struggled with calm requests and deflation of persistent factory gates at home, maintaining pressure on Beijing to launch more stimuli.
Policy makers have increased consumer subsidies, but prolonged declines are still complaining, with real estate to be a major storage of household wealth.
The reluctance of the household to take the hypotek is reflected in the Bank Loan data July, which was unexpectedly contracted for the first time in 20 years.
And consumers’ expenditure can receive further blows if the new decision -this is a leading Chinese company that prohibits the company and employees from the skirting of social insurance payments causes job loss, with many companies and workers have struggled to meet the needs of life. City unemployment rose to 5.2% in July from 5% in June.
The decision must support local authorities that lack money-loss of land sales revenue-in-refilling retirement cash, because public financial demands continue to grow. Extreme weather, for example, has caused damage to the road of $ 2.2 billion since July 1.
Analysts surveyed by Reuters estimate that the Private Sector PMI rating will enter 49.7, up from 49.5 a month earlier. Data will be released on Monday.
Source: Reuters
