China’s factory activity remains in contraction amid weak economic momentum
China’s official manufacturing purchasing managers’ index (PMI) stood at 49.1 in August, down from a reading of 49.4 in July
The reading fell short of a survey by Bloomberg, which had predicted a slight increase to 49.5.
A reading above 50 typically indicates an expansion of economic activity, whereas a reading below implies a contraction.
“China’s economic momentum likely weakened recently. The fiscal policy stance remains quite restrictive, which may have contributed to the subdued economic performance,” said Zhang Zhiwei, chief economist of Hong Kong and Shanghai-based Pinpoint Asset Management.
“To achieve an economic stabilisation, fiscal policy stance needs to be much more supportive,” he added.
Within the official manufacturing PMI, the new manufacturing export order subindex stood at 48.7 in August, compared with a reading of 48.5 in July.