China’s Economy Under Pressure as Factory Activity Slows in August, Services Contract

A worker works on a production line manufacturing bicycle steel rims at a factory, as the country is hit by the COVID-19 outbreak, in Hangzhou, Zhejiang province, China, on March 2, 2020. China Daily via Reuters

BEIJING—China’s businesses and the broader economy came under increasing pressure in August as factory activity expanded at a slower pace while the services sector slumped into contraction, raising the likelihood of more near-term policy support to boost growth.

The world’s second-biggest economy witnessed a recovery from a COVID-19 slump, but momentum has weakened recently due to domestic COVID-19 outbreaks, high raw material prices, slowing exports, tighter measures to tame hot property prices and a campaign to reduce carbon emissions.