China’s Caixin manufacturing PMI slows in July

Markit and Caixin reported that China’s manufacturing purchasing managers’ index (PMI) slowed in July due to productivity losses in new orders and manufacturing employment.

The manufacturing PMI was 50.4 in July, down from 51.7 in June.

China’s National Bureau of Statistics (NBS) reported Friday that the July manufacturing PMI was 49, down from 50.2 in June. A reading below 50 indicates a contraction in manufacturing.

According to the report, China’s major manufacturing hubs, including Shanghai, recovered sharply in June after measures to prevent the COVID-19 outbreak ended in the spring. However, the recovery slowed with a new wave of outbreaks and weaker domestic and global demand, including the battered real estate market.

China will continue to pursue a zero-tolerance policy in the second half of 2022 because it believes this is the best way to contain the spread of COVID-19.

The zero-tolerance policy could hurt the 5.5% GDP growth target for this year, but the Chinese government has pledged to put together a stimulus package focused on creating stable jobs.

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