Chinese manufacturing contracted for a fourth consecutive month last month, official data showed on Saturday, a worse-than-expected result reflecting the world’s second-largest economy’s struggle to recover.
The purchasing managers’ index — a key barometer of industrial output — stood at 49.1 points last month, China’s National Bureau of Statistics said.
This represents a stronger contraction than in July (49.4 points) for the index, which is based in part on company order books.
Photo: AFP
A figure above 50 indicates an expansion in manufacturing activity, while below that is a contraction.
Analysts surveyed by Bloomberg had anticipated a decline for last month — but a more moderate one of 49.5.
China’s post-pandemic recovery has been brief and less robust than expected.
While some sectors have largely regained their strength — including tourism and the auto industry — others are struggling, particularly real estate, a key growth driver.
In mid-August, China released a series of economic indicators deemed disappointing despite recent government measures aimed at boosting growth.
The nation’s residential slump deepened last month, as expectations of a further drop in new-home prices hampered the country’s efforts to cushion the downturn.
The value of new-home sales from the 100 biggest real estate companies fell about 26.8 percent from a year earlier to 251 billion yuan (US$35.4 billion), more than the 19.7 percent decline in July, according to preliminary data released by China Real Estate Information Corp on Saturday.
The accelerating slide shows the waning impact of the latest rescue package unveiled in May. The sector continues to be a drag on China’s economy, which needs more stimulus to meet the government’s 5 percent growth target this year, Bloomberg Economics said.
China has been considering a new funding option for local governments to buy unsold homes to prop up the market, people familiar with the matter said last month. The latest proposal would allow local governments to fund their home purchases via so-called special bonds, they said.
Cash-strapped developers — many in default for more than a year — are counting on a sales revival to persuade debt holders and fight off liquidation. Dexin China Holdings Co (德信中國控股) in June became the latest builder to be ordered to liquidate by a Hong Kong court, while Country Garden Holdings Co (碧桂園) is considering extending payments on some of its yuan bonds again.
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