TOP BIT
China’s industrial output contracted again in July. The official Purchasing Managers’ Index (PMI) fell to 49.3—well below the 50-point growth threshold and missing forecasts. Despite a temporary tariff truce with the US, export pressure remains high, domestic demand is sluggish, and the government is hesitant to roll out fresh stimulus.
The Details
📉 Fourth Month in the Red: The official PMI has held below 50 since April. July’s drop was steeper than expected—its lowest level in six months.
📦 Export Momentum Fades: Front-loading ahead of US tariffs appears exhausted. New export orders have stayed in contraction for 15 straight months.
🌡️ Weather and Uncertainty: Extreme weather, price competition, and geopolitical tensions are weighing on production. New orders and employment are both shrinking.
🛑 Politburo Remains Vague: At its July meeting, China’s leadership announced no major stimulus—only targeted support for hard-hit sectors.
Why It Matters
China’s recovery is losing steam: Output, orders, and sentiment remain weak. This hits not only Chinese firms but suppliers and trade partners worldwide.
US–China tensions persist: Although another tariff hike was delayed, the truce is expiring soon. Talks in Stockholm yielded no breakthrough.
Double whammy for Europe: First, missing stimulus from the Chinese market. Second, the EU must contend with rising import surpluses from China and an unfavorable tariff pact with the US.
Background
Official data show a broad cooling in China’s industrial activity for July; the services sector is also stagnating. The government cites “market distortions” and plans targeted measures to curb undercutting in manufacturing. Economists call for stronger consumer‐demand stimulus, but concrete steps are lacking.
Meanwhile, signs are mounting that Beijing is deliberately weakening the yuan to secure export advantages.
📊 All Data & Details: CNBC, Wall Street Journal
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