Contraction in China factory activity extends into a fourth month

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The sunset glow is seen over buildings and a ferris wheel on May 13, 2022 in Beijing, China. China's factory activity contracted for a fourth consecutive month in July, while non-manufacturing activity slowed to its weakest this year as the world's second-largest economy struggles to revive growth momentum in the wake of soft global demand. The official manufacturing purchasing managers' index came in at 49.3 in July — compared with 49.0 in June, 48.8 in May and 49.2 in April — according to data from the National Bureau of Statistics released on Monday. July's reading was slightly better than the 49.2 median forecast in a Reuters poll. Monday's figures also showed China posting its weakest official non-manufacturing PMI reading this year, coming in at 51.5 in July — compared with 53.2 in June, 54.5 in May and 56.4 in April. A PMI reading above 50 points to an expansion in activity, while a reading below that level suggests a contraction. "Although China's manufacturing PMI rebounded to 49.3% this month, some enterprises in the survey reported that the current external environment is complicated and severe, overseas orders have decreased, and insufficient demand is still the main difficulty facing enterprises," Zhao Qinghe, a senior NBS official, wrote in an accompanying statement Monday. These readings for July point to the "tortuous" economic recovery that China's top leaders described last Monday, which the Politburo attributed to insufficient domestic demand, difficulties in the operation of some enterprises, many risks and hidden dangers in key areas and a grim and complex external environment.