China manufacturing sinks again in July as US trade talks stall
A spate of natural disasters has also hit the country this summer, with at least 48 people killed and tens of thousands evacuated this week as northern China endured some of its worst floods in years.
"While the statistics bureau partly attributed the decline to weather-related disruptions to production, the breakdown suggests that demand has softened too," Zichun Huang, China economist at Capital Economics, said.
"The new export orders index dropped back as high tariffs began to weigh again," Huang added.
"More of the current weakness in demand appears to be domestic in nature," she said.
China's bruising trade war with the United States - now on hold pending a deal - has hit the export-dependent economy.
Beijing and Washington called a 90-day truce on the staggeringly high duties in May, and held two days of talks this week aimed at avoiding their reimposition on Aug 12.
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