China’s manufacturing sector continued to face headwinds in August, shrinking for the fifth straight month despite a slight improvement in factory output. Official data released Sunday by the National Bureau of Statistics (NBS) showed the Purchasing Managers’ Index (PMI) at 49.4, up marginally from July’s 49.3 but still below the crucial 50-point mark that separates growth from contraction.
The figure fell short of Bloomberg’s analysts’ forecast of 49.5, highlighting the persistent challenges confronting the world’s second-largest economy. The last time China’s PMI registered growth was in March, underscoring the strain from sluggish domestic demand, global economic uncertainties, and lingering impacts of the prolonged trade tensions with the United States.
NBS statistician Zhao Qinghe described the modest uptick as evidence that “overall economic prosperity continues to expand,” suggesting that recent policy measures and renewed trade negotiations with Washington may be providing some relief. Earlier this month, Beijing and Washington signaled a thaw in their trade disputes, reaching a new truce that temporarily eased tensions. However, the latest data indicates that confidence in the manufacturing sector remains fragile.
Economists note that while the slight rise in PMI shows resilience, structural challenges persist. Weak demand in both domestic and export markets, rising financing costs for manufacturers, and global supply chain disruptions continue to weigh on recovery efforts.
To counter these pressures, Beijing has ramped up measures to stimulate growth, including targeted fiscal support and monetary easing. Analysts say sustained improvement in the manufacturing sector will depend heavily on the outcome of ongoing U.S.-China trade talks and the government’s ability to boost domestic consumption.
For now, China’s manufacturing industry remains in contraction, reflecting broader concerns about the country’s economic momentum in the second half of the year.
