LIUZHOU, CHINA – JULY 25: A robot arm assembles auto parts at the factory of Guangxi Liuzhou Zhuotong Auto Parts Co., Ltd. in Liuzhou, Guangxi Zhuang Autonomous Region, China, on July 25, 2026.
He Huawen | Visual China Group | Getty Images
China’s manufacturing activity contracted for the second month in a row in August, weaker than market expectations, putting pressure on Beijing to support the economy as growth loses momentum.
Data from the Office for National Statistics on Monday showed the official purchasing managers index was 49.8, compared with 49.2 in July and above the 49.6 expected by economists polled by Reuters.
China’s economy is under increasing strain, with growth slowing to 4.3% in the second quarter, the weakest pace since late 2022, as weak domestic demand and a prolonged real estate recession continue to weigh on activity.
The economic slump deepened in the second half of the year, with consumer spending stalling, urban investment contracting at a faster pace and unemployment rising.
Retail sales and industrial production both slowed in July, while industrial profit growth slowed to its slowest pace this year.
Exports are one of the few pillars supporting growth this year, helping to cushion some of the impact of external shocks as a global AI infrastructure investment boom boosts demand for high-tech products made in China. Outbound shipments posted double-digit growth for most of this year.
Chinese policymakers have vowed to roll out new policy measures in a timely manner and signaled room for further fiscal spending and monetary easing. But economists said the scale of future support was likely to be limited.
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