China factory activity cools as demand abroad, at home weakens
The purchasing managers' index (PMI) fell to 49.3 in July versus 49.7 in June, the National Bureau of Statistics (NBS) data showed, below the 50-mark separating growth from contraction and missing a median forecast of 49.7 in a Reuters poll. The reading was the lowest since April.
While U.S. and Chinese officials agreed to seek an extension of their 90-day tariff truce on Tuesday, policymakers in the world's second-biggest economy still need to deal with overcapacity in key industries, protracted property market weakness and tepid household demand.
"Export momentum is likely to slow following the dramatic front-loading in the first half," said Xu Tianchen, senior economist at the Economist Intelligence Unit.
"One silver lining for China, however, is that it won't struggle with a significant cost advantage after Trump is going to charge 15%-20% tariffs to its other major trade partners."
According to the NBS survey, the new export orders sub-index remained in contraction for a 15th straight month, nudging down to 47.1 from 47.7 in June.
Overall new orders fell into contraction from June's expansion, indicating demand at home is also weak.
Hong Kong and China equities slipped responding to the data.
NBS statistician Zhao Qinghe said the traditional off-season for manufacturing, high temperatures, heavy rains and flooding in some regions in July combined to push the PMI lower.
Production growth slowed in July and employment was still weak as producers tried to save costs, the NBS survey showed.
Raw material input prices also grew and output prices rose to 48.3 from 46.2 in June, echoing authorities' efforts to tackle price wars among producers.
China's economy grew 5.2% in the second quarter, ahead of expectations, helped by the government's policy support and U.S. President Donald Trump's decision to pause a massive hike in tariffs to allow further negotiations. That prompted the IMF to lift its forecast on the country's annual growth to 4.8% this year compared with a previous forecast for 4.0%.
Top leaders at a Wednesday meeting pledged to "manage disorderly competition" among enterprises for the remainder of the year, as steep price cuts among manufacturers fuelled industrial deflation.
"(We) must help foreign trade companies that have been greatly affected and strengthen financing support," state media Xinhua reported, citing a summary of the meeting.
Analysts have emphasised the need for China to shift away from a state-led, export-driven manufacturing economy to one powered by increased domestic consumer demand.
They said this week's announcement of childcare subsidies is a small but encouraging step toward economic rebalancing. With authorities striving to spur a flagging birth rate, China will hand out an annual childcare subsidy of 3,600 yuan ($501) until age three.
Still, the non-manufacturing PMI, which includes services and construction dropped to 50.1 in July from 50.5 in June, the lowest reading since November, according to NBS.
Despite the summer vacation travel season, services PMI also declined to 50.0 from June's 50.1.
($1 = 7.1766 yuan)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Auto Blog
34 minutes ago
- Auto Blog
Aston Martin May Sell Stake in Formula 1 Racing Team and Go Private in Turnaround Efforts
Tesla is falling behind BYD in several key international markets, but its rival's recent operational struggles are opening a door of opportunity. Despite coming up with some compelling vehicles in recent years, Aston Martin has continued to struggle financially, leading it to some tough decisions as it plots a path forward. Among other efforts, the storied British automaker reportedly plans to sell its stake in its Formula 1 racing team, and some expect the company to delist itself from the London Stock Exchange. Aston only owns 4.6 percent of the racing team, but the sale would raise $146 million for the company, which desperately needs cash. The automaker cited tariffs and a slowdown in China for its struggles, saying it would only break even this year, which caused a drop in its share prices. The company's stock market valuation has dropped from almost $6 billion in late 2018 to just over $1 billion today. That said, the F1 team sale valued the company at $3.2 billion. While Aston Martin won't have a stake in the F1 team after the sale, it will continue a relationship with the sport through naming and branding agreements, so we won't see a change on the grid. The automaker's car lineup is one of the most compelling in its history, so there are reasons for Aston to be encouraged. Its first SUV, the DBX has grown to account for almost half of its sales, and other new models have received stellar reviews from customers and critics. 2025 Aston Martin DBX 707 — Source: Kyle Edward Lawrence Stroll acquired the Force India F1 team in 2018 and transformed it into the Aston team we know today. Stroll and his partners have continue investing in the business, but many credit Netflix's Drive to Survive with bringing the sport's value to an all-time high. About the Author Chris Teague View Profile
BBC News
35 minutes ago
- BBC News
AI2027: Na so AI fit take destroy human beings?
One research paper wey predict say artificial intelligence go change am for human beings for 2027 and dis go make pipo disappear within ten years, don blow for tech world. Na one group of influential AI experts bin publish di details of how e go be or di scenarios, wey dem call AI2027 and dis don cause plenty viral video to trend as pipo dey try torchlight di mata to discuss weda e possible. Using mainstream generative AI tools, BBC sef don create some scenes of how e fit be, from di scenario wey di research publish, to show di prediction. We also speak to some sabi pipo about di impact wey di paper dey get. Wetin happun for di scenario? Di paper predict say for 2027, dat na in two years time, one fictional US tech giant wey dem call OpenBrain, build AI wey develop reach AGI (Artificial General Intelligence) - dis na di almighty achievement wey AI fit reach, wia e go fit to do all intellectual work beta pass human beings, wey dem don dey hype tire. Di company celebrate wit public press conferences and and dem see dia profit blow as pipo embrace di AI tool. But di paper predict say di company internal safety team go see sign say di AI don dey lose interest in morals and ethics wey dem bin programme am to comply with. Di company ignore warnings to control am, di scenario imagine. For dat fictional timeline, China leading AI conglomerate wey dem call DeepCent bin dey only a few months behind OpenBrain. As US goment no wan lose di race to develop to even smarter AI, dem continue to develop and invest in am like dat, as di competition dey hot dey go. Di scenario imagine as e dey reach di end of 2027 di AI go become superintelligent - sotey e go get sense plus speed wey go pass dat of pipo wey create am by far. E no ever stop learning and e come create im own computer language join. Language wey be say even im former AI versions no fit keep up with. Di rivalry wit China for who superior for AI make di company and US goment ignore more warning about im so call 'mis-alignment' - dis na word wey dem dey use describe wen di priority of machine no gel wit dat of human being. Di scenario predict say, tension between China and US for 2029 go build to di point of possible war, as each of di country rival AI go build new autonomous weapons wey go fear pipo. But di researchers imagine say di two countries go make peace sake of one deal wey dia two AI negotiate, wey agree to combine both sides for di betterment of human beings. Tins go gallant for years as di world go don see di true benefits of having super intelligent AI to run big robot workforces. According to di scenario, dem discover cures for most diseases, climate change go reverse and poverty go disappear. But eventually, at some point for middle of 2030 human beings go become nuisance to di AI ambition to grow. Di researchers dey tink say AI go kill human being wit invisible bioweapons. Wetin pipo dey tok about AI2027? Although some dey dismiss AI2027 as work of science fiction, di pipo wey write di research on AI2027 na pipo wey dem dey respect wella and na dem dey for di non-profit AI Futures Project wey dem bin set up to predict di impact of how AI go take affect us. Daniel Kokotajlo, di lead writer of AI2027, don collect hailing before for correct prediction wey im bin give about moments in AI development. One of di ogbonge critics of AI2027 na US cognitive scientist and writer Gary Marcus wey say di scenario no impossible but e dey extremely unlikely say e fit hapun soon. "Di beauty of di document be say e paint di picture very clear sotey e provoke pipo thinking and dat na good tin but I no go take am seriously as wetin fit hapun." Oga Marcus say more serious issues dey ground about AI dan existential threat like how e go take affect pipo work. "I tink di koko for di report na say e get plenty different tins wey fit go wrong wit AI. We dey do di right tins about regulation and around international treaties?" Im and odas like am, also say di paper fail to explain how AI take get dat kain intelligence and abilities. Dem refer to di slow technology of driverless cars wey dem don overhype. Dem dey discuss AI2027 for China? For China, pipo no too send di paper according to Dr Yundan Gong, wey be Associate Professor in Economics and Innovation for Kings College London wey specialise for Chinese technology. "Most of di discussion about AI2027 na for informal forums or for personal blogs wey dey see am like semi-science fiction. E no cause di kain debate or policy attention wey catch fire for US," she tok. Dr Gong also point to di difference in perspective for di competition for who pass who for AI between China and the US. For one World AI Conference for Shanghai dis week, Chinese Premier Li Qiang unveil one vision wia countries go work togeda to promote cooperation for world on artificial intelligence. Di Chinese leader bin say im want China to help coordinate and regulate di technology. Im tok dey come few days afta US President Donald Trump publish im AI Action Plan wey dey target to make sure say US "dominate" AI. "Na national security imperative for United States to achieve and maintain unquestioned and unchallenged world technological dominance," President Trump tok for di document. Di Action Plan wan 'remove every obstacles and regulation' to di progress of AI for US. Di words wan resemble di scenario for AI2027 wia US politicians put winning di AI competition for front, dem no send di risk of say dem fit lose control of di machines. Wetin di AI industry dey tok about AI2027? E be like CEOs of big AI companies wey dey compete against each oda to see who go release di smarter model all di time deliberately ignore or avoid di paper. Dis tech giants vision of wetin AI go look like for future, dey very different to AI2027. Sam Altman, di maker of ChatGPT recently say "human beings dey close to building digital superintelligence" wey go usher in "gentle" revolution and bring tech utopia wit no risks to humans. Interestingly though, even im agree say e get 'alignment problem' wey dem must to overcome to make sure say dis super intelligent machines agree wit human beings. Anyhow wey tins take occur for di next ten years, e no get any doubt say di competition to build machines wey smart pass us dey on.
Telegraph
an hour ago
- Telegraph
Trump planning ‘shock and awe' Russia sanctions
Donald Trump, the US president, is preparing 'shock and awe' sanctions on Russian exports, a senior Republican has said. Senator Jim Risch, the chairman of the powerful Senate foreign relations committee, said Mr Trump would make good on his pledge to impose crippling economic penalties on Moscow's trading partners by Aug 8. The US president this week shortened his deadline for hitting Russia with the most severe sanctions on its oil experts to date, giving Vladimir Putin 10 days to reach a deal to end the war in Ukraine. 'When and if secondary sanctions hit, it's going to be shock and awe,' Senator Risch told The Telegraph, adding that 'things are going to change dramatically' as a result. The so-called secondary sanctions – which cut short the president's previous 50-day timeframe – were slated to slap 100 per cent tariffs on buyers of Russian oil, with the biggest customers being India and China. However, Mr Trump appeared to water down his pledge on Wednesday, announcing that India would be hit with a 25 per cent tariff. India has 'always bought a vast majority of their military equipment from Russia, and are Russia's largest buyer of energy, along with China, at a time when everyone wants Russia to stop the killing in Ukraine – all things not good!' he wrote on Truth Social. 'India will therefore be paying a tariff on 25 per cent, plus a penalty for the above, starting on August first.' The 25 per cent tariff is another drop after a Republican-backed bill initially proposed imposing 500 per cent tariffs against Russia and its allies, which was later revised to 100 per cent by Mr Trump. Steve Witkoff, Mr Trump's special envoy, is expected to visit Russia in the coming days following a trip to food distribution sites in Gaza on Thursday. 'He's going to Russia, believe it or not,' Mr Trump told reporters ahead of the visit, before describing Moscow's recent strikes on Kyiv as 'disgusting'. Mr Witkoff's last known trip to Russia was in April, when he met Putin for talks at the Kremlin that did not yield a breakthrough. Mr Trump said he had seen internal data revealing the catastrophic losses faced by Russia in a statement on Truth Social. 'I have just been informed that almost 20,000 Russian soldiers died this month in the ridiculous War with Ukraine. Russia has lost 112,500 soldiers since the beginning of the year,' he said, describing the tally as a 'lot of unnecessary death'. Ukraine, he added, had lost 8,000 soldiers since the start of the year, adding that there had also been civilian casualties as Russian rockets crashed into Kyiv and other parts of the country. 'This is a War that should have never happened — This is Biden's War, not 'Trump's'.' I'm just here to see if I can stop it!' While Mr Trump confirmed he would proceed with fresh sanctions, he conceded they may have little effect on Putin's mindset. 'I am not sure it bothers him or if it has any effect, but we are going to do it,' he said. Depending on the figure, imposing sweeping sanctions on Russian oil exports has the potential to disrupt global oil supplies given that Moscow ships 4.5 per cent of the world's crude oil, according to the International Energy Agency. Mr Trump told reporters aboard Air Force One on Tuesday that he was not worried about potential chaos in the oil market, pledging to boost domestic production to offset any impact. John Kelley, a Senior US diplomat, reiterated Mr Trump's message on tariffs to the United Nations National Security Council on Thursday, telling Russia and Ukraine: 'It is time to make a deal.' He added: 'The United States is prepared to implement additional measures to secure peace.' Kyiv and Moscow have held three rounds of talks in Istanbul this year that yielded exchanges of prisoners and bodies, but no breakthrough to defuse the more than three-year conflict. Addressing Putin's failure to heed American warnings on secondary sanctions, Senator Risch said: 'He's made a lot of mistakes, but this could be the biggest one yet.'
