High-tech manufacturing hit 53.2, the highest level this year
China’s GDP expanded 6.7 percent in Q2
China is aiming to reduce excessive industrial capacity
Floods Impacted growth
The purchasing managers’ index (PMI) came in at 49.9 in July, slightly lower than June’s 50, according to the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing.
A reading above 50 indicates expansion, while a reading below 50 reflects contraction.
NBS statistician Zhao Qinghe said floods across much of the country disrupted manufacturing activity and transportation.
Torrential rain was seen across more than half of China’s territory this summer, resulting in floods, landslides and causing heavy economic losses and fatalities.
In addition, slowing market demand and weak investment sentiment in the private sector contributed to the contraction in the manufacturing sector, Zhao added.
During the January-June period, fixed-asset investment increased 9 percent year on year, 0.6 percentage points lower than that recorded between January-May. Private sector investment growth slowed further to 2.8 percent in the first six months.
The manufacturing sector contracted as the country has embarked on painstaking measures to reduce excessive industrial capacity such as steel and cement.
The sub-index for sectors with high energy consumption fell 0.5 percentage points to 47.7, the fourth consecutive monthly decline.
The sub-index measuring production stood at 52.1, 0.4 percentage points lower than a month ago.
The sub-index for new orders settled at 50.4, 0.1 percentage points lower than the previous month, declining for a fourth month in a row.