China’s economic momentum weakened further in July as official data pointed to softer factory activity and slower retail sales growth, adding to signs of persistent domestic demand challenges.
The National Bureau of Statistics reported on Monday that China’s official manufacturing purchasing managers’ index (PMI) fell to 49.4 in July from 49.5 in June, remaining below the 50-point threshold that separates expansion from contraction. The non-manufacturing PMI, which tracks services and construction, also declined to 50.2 from 50.5 the previous month, indicating marginal growth.
Retail sales, a key gauge of consumer spending, rose 2.0% year-on-year in July, down from a 2.7% increase in June and below market expectations of 2.3%. Industrial production growth slowed to 5.1% year-on-year from 5.3% in June, reflecting weaker factory output amid soft domestic and external demand.
Analysts cited persistent pressures from a prolonged property downturn, subdued consumer confidence and cautious business investment as primary drags on growth. The faltering recovery has prompted calls for additional policy support, though authorities have so far refrained from large-scale stimulus measures.
The latest data reinforce concerns that China’s post-pandemic rebound is losing steam, with implications for global commodity demand and supply chains. The slowdown comes as policymakers face a delicate balancing act between supporting growth and managing debt risks.
China’s central bank has maintained a cautious monetary stance, with recent liquidity injections aimed at stabilizing financial conditions rather than stimulating a broad-based recovery.
