Chinese Factory Activity Sinks, Weighing on Weak Economy

By The Associated Press
The Associated Press
The Associated Press
July 31, 2022 Updated: August 1, 2022

BEIJING—Chinese manufacturing’s recovery from anti-virus shutdowns faltered in July as activity sank, a survey showed Sunday, adding to pressure on the struggling economy.

Factory activity was depressed by weak global demand and anti-virus controls that are weighing on domestic consumer spending, according to the national statistics agency and an official industry group, the China Federation of Logistics & Purchasing.

A monthly purchasing managers’ index issued by the Federation and the National Bureau of Statistics retreated to 49 from June’s 50.2 on a 100-point scale on which numbers below 50 indicate activity declining. Sub-measures of new orders, exports, and employment declined.

The Chinese Communist Party (CCP) has stopped talking about this year’s official economic growth target of 5.5 percent after output shrank in the three months ending in June compared with the previous quarter.

The port of Shanghai, the world’s busiest, says activity is back to normal, but factories and other companies are operating under anti-virus controls that limit their workforces and weigh on production.

An index of production tumbled to 49.8 from June’s 52.8. New orders declined 1.9 points to 48.5. New export orders lost 2.1 points to 47.4.

Chinese leaders have avoided large-scale stimulus spending, possibly for fear of reigniting a rise in debt.