According to data released by the National Bureau of Statistics of the People’s Republic of China on August 31, the Purchasing Managers’ Index (PMI) for the manufacturing sector in China in August was 49.4%, marking the fifth consecutive month below the 50% threshold, indicating contraction. Despite a slight increase in the PMI data, the downward pressure on China’s manufacturing sector continues to persist.
The manufacturing PMI for August was 49.4%, a 0.1 percentage point increase from the previous month, but still below the expansion threshold of 50%.
This data reflects the current situation of China’s manufacturing industry:
The PMI for large enterprises was 50.8%, a 0.5 percentage point increase from the previous month, maintaining a stable expansion trend, which to some extent stabilized the foundation of the manufacturing industry. However, the PMI for medium and small-sized enterprises remains below the threshold, indicating continued challenges in their operations.
While the performance of large enterprises provides some support, the overall weakness in the manufacturing industry remains unchanged, with insufficient market demand still being a major bottleneck.
In contrast to the ongoing contraction in manufacturing, the non-manufacturing sector has maintained its expansion.
In August, the business activity index for the non-manufacturing sector was 50.3%, a 0.2 percentage point increase from the previous month, exceeding the critical point.
The business activity index for the service industry was 50.5%, showing a slight increase from the previous month, with industries such as railway transportation, water transportation, and aviation demonstrating strong performance.
The business activity index for the construction industry was 49.1%, a 1.5 percentage point decrease from the previous month, falling into the contraction zone. This decline may be attributed to the continued stagnation in the real estate market and a slowdown in infrastructure investment, becoming a significant drag on the expansion of the non-manufacturing sector.
Although the comprehensive PMI output index for August was 50.5%, indicating a slight increase and showing that overall business activities are still expanding, the persistent contraction in manufacturing and the divergent performance of the non-manufacturing sector cast a shadow over the future of the Chinese economy. The continued weakness in industries such as real estate and retail reflects underlying issues of insufficient domestic demand.
These challenges highlight the need for policy adjustments and structural reforms to stimulate growth and address the imbalances in China’s economy.