China manufacturing plunges again in July as U.S. trade talks stall
China’s Manufacturing Output Continues to Contraction
On Thursday, China’s factory output fell more than expected in July, marking the fourth straight month of decline as Beijing struggles to secure a trade deal with the United States.
Industrial PMI Shows Downturn
The Purchasing Managers’ Index (PMI), a key gauge of industrial activity, stood at 49.3, down from 49.7 in June and falling well below the 50‑point threshold that separates growth from contraction.
According to an NBS statistician Zhao Qinghe, the manufacturing sector’s business climate worsened from the previous month. Zhao attributed the decline to the industry’s typical slack period and weather disruptions such as high temperatures, heavy rains and floods in certain areas.
- Demand Softens – The breakdown suggests that domestic demand has also weakened.
- Export Orders Decline – New export orders dropped back as tariffs re‑increase, pointing to more domestic weakness in demand.
Natural Disasters Amplify Economic Pressure
This summer, a series of natural disasters has hit China, with northern China enduring some of its worst floods in years. The floods have killed at least 48 people and forced tens of thousands to evacuate.
As a result, China’s economy faces the dual challenge of declining manufacturing output and rising life‑threatening natural disasters.
Trade War Hits Export‑Dependent Economy
China’s ongoing trade war with the United States, now on hold pending a deal, continues to hit the export‑dependent economy. Beijing and Washington called a 90‑day truce on staggeringly high duties in May and held two days of talks this week focused on avoiding re‑imposition on August 12.
Despite indications that both sides want to extend the deadline, the negotiations ended without an agreement.
