Overview
- Official data show the manufacturing PMI rose to 49.8 in August, the non-manufacturing PMI held at 49.0, and the composite index was 49.5, all below the 50 mark that separates expansion from contraction.
- The manufacturing uptick beats economist forecasts and suggests factory activity is easing its decline but still lacks enough momentum to return to growth.
- Services and construction remain stalled at 49.0, a sign that consumer spending and urban investment have not recovered and that job and income pressures could persist.
- Exports have been a bright spot, with double-digit shipment growth driven by global AI infrastructure demand helping to offset domestic weakness in the near term.
- The mixed picture increases market expectations that Beijing will provide targeted fiscal and monetary measures yet economists expect any support to be modest given deep property-sector problems.