China's economic situation - Activity in China's manufacturing sector continues to decline
The management floors in China's manufacturing industry continue to be cautious regarding the market situation. The Purchasing Managers' Index (PMI) for the sector stood at 49.5 points in June, as announced by the Chinese Statistics Bureau in Beijing on Sunday. This important indicator for decision-makers and investors failed to exceed the threshold of 50 points for the second consecutive month, beyond which statisticians assume an expansion of industrial activity. Analysts had predicted a similar value. In the previous month, the department had also recorded 49.5 points.
In the non-manufacturing sector, which includes the service sector and construction industry, the mood worsened by 0.6 points compared to the previous month and reached 50.5 points, just above the expansion threshold. The index published by the Statistics Bureau mainly reflects the situation at state-owned enterprises. According to the department, the Chinese economy is still on an expansionary path, but the foundation for sustained improvement must be solidified, as stated in the announcement.
China's government continues to fight against a long-lasting real estate crisis. The sector was once a popular investment opportunity for the Chinese. Due to price drops and declining values, many households have less disposable income, contributing to weak domestic consumption. Additionally, there is high unemployment among young people and pressure in international trade due to sanctions, such as in the crucial export market of the US. The EU has also threatened tariffs on electric cars made in China.
- Given the economic situation, the company has decided to be cautious with its investment activities in Beijing.
- Despite the challenging economic situation, the Purchasing Managers' Index for the non-manufacturing sector in China marginally exceeded the expansion threshold in June.
- The continued weak economic situation in China, influenced by issues like the real estate crisis and international sanctions, is causing concerns for various sectors, including the company.
- Analysts believe that the overall economic situation in China, as indicated by the PMI, suggests that while the industrial activity is contracting, the service sector and construction industry are still expanding, albeit at a slower pace.
