The Manufacturing Purchasing Managers’ Index (PMI), the main indicator measuring industrial activity, in June remained at the May level at 49.5, according to data from the National Bureau of Statistics.
An index below 50 reflects a decline in activity, while an index above this number reflects an expansion in activity.
Policymakers will meet in Beijing in mid-July for the third plenary session of the 20th Central Committee of the Communist Party of China, which will focus on the country’s economic recovery, particularly after the Covid crisis.
The contraction in the manufacturing sector is a worrying sign for the world’s second-largest economy, which has struggled to regain momentum since late 2022, when Beijing lifted strict Covid-19 restrictions that had hammered growth.
The National Bureau of Statistics also confirmed on Sunday that the non-manufacturing PMI, which takes activity in the services sector into account, in June reached 50.5.
This figure represents a decrease from 51.1 recorded last month.
Although the country “maintained overall growth” in June, “the foundation for continued recovery and improvement still needs to be consolidated,” Zhao Qinghe, an expert with the National Bureau of Statistics, warned in a statement Sunday.
The world’s second-largest economy is suffering from a real estate debt crisis, declining consumption and high youth unemployment.
Chinese President Xi Jinping announced on Friday that the ruling Communist Party plans to implement “major” reforms, saying: “We will form… a more market-oriented legal and international business environment.”
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