China’s manufacturing PMI continued to decline, as reported by the National Bureau of Statistics of China on August 31. The manufacturing PMI decreased from 49.4 in July to 49.1 in August, falling short of market expectations of 49.5 and marking the fourth consecutive month of contraction.

In terms of the PMI sub-indices, nearly all indicators declined in August, with only the supplier delivery time index showing a slight increase. However, all indices remained in contraction territory. Notably, the production and new orders indices have been on a downward trend since March 2024.

Meanwhile, the non-manufacturing PMI slightly increased from 50.2 in July to 50.3 in August. By industry, while the service sector’s business activity index rose by 0.2, the construction sector’s business activity index declined again to 50.6, marking the fourth consecutive month of decline.

Overall, China’s domestic economy continues to be weighed down by the real estate market, leading to insufficient effective demand. On the other hand, the government has yet to implement large-scale economic stimulus measures, and with only four months left in 2024, the pressure to achieve the annual GDP growth target of 5% is intensifying.