China manufacturing contracts in July more than expected

Beijing – China An official scale for manufacturing activity On Thursday, it indicated a shrinkage of worse than expected in July, amid a slower economic growth and continuous American trade tensions.

The manufacturer of the manufacturing managers for the month of July was 49.3, and the loss of expectations for 49.7, according to Reuters.

The official manufacturing manager of manufacturing in China was less than 50 marks, which reflects the shrinkage rather than expansion, Since April.

Cameron Johnson, Shanghai’s partner at Tidalwave Solptions, said: “The Procurement Manager Index is less due to weather challenges, as well as converting some requests to low countries such as Vietnam,” said Cameron Johnson, a Shanghai partner at Tidalwave Solutions.

Johnson said that the total export numbers are expected to remain stable for the next quarter, noting that some production will be transferred to other countries to take advantage of the low definitions until China sets its duty rates with the United States

Tensions between the two largest economies in the world escalated in April with each side that imposes a tariff of more than 100 % on goods from the other. In May, the two sides agreed that most additional duties decreased for 90 days, making the actual rate of China’s exports to the United States About 43 %.

The truce was set to end in mid -August. Representatives of the world’s largest economists ended a meeting in Stockholm this week Without announcing the extension of the agreementThat was widely expected.

Earlier in July, the United States reached an agreement with Vietnam that imposed a 40 % tariff if the goods were made elsewhere and was only transported to a country in Southeast Asia for sale for American goods made in Vietnam that will face a 20 % tariff when shipping to the United States

As part of the latest indicators with participants in China, sub -indicators showed that new workers, orders and raw materials were also contracted in July. The job index reached 48, from 47.9 in June, while this decreased for new requests to 49.4, a decrease from 50.2 in June.

National Office for Statistics Decreased manufacturing rates for project managers In July, traditional factors are in their season and factors such as severe heat and heavy rains in parts of the country.

In one of the latest harsh weather cases, at least 30 people died this week on the outskirts of Beijing after the city released the highest red rainy level, according to government media.

In July last year, the reading managers of the official manufacturing managers were 49.4, with the new sub -index at 49.3.

In addition to bad weather, Goldman Sachsus analysts said in a note after issuing the data of the Procurement Manager Index, that the efforts made by Beijing “combating the revolution” to confront the problems of excessive the ability to influence the economy.

The analysts added: “The index of the participating in industrialization was distinguished by the decrease in the output, a lower stock, but the sub -indicators of the prices are higher, while the construction participating directors index decreased on high temperatures and heavy rains.”

Chen Young, chief economist at the Treasury Department at Sumitomo Mitsoy Banking Company (China), said the decrease in both manufacturing and services index of purchasing managers in July is in line with the expectations of slowing growth in the second half of the year, as the gross domestic product in the first six months was mainly supported by companies that escalated orders before the induction of urbanization. He was speaking on Thursday on CNBC’sChina’s connection“

He said there is a little incentive for companies to intensify requests again, regardless of the results of commercial conversations. “So, the impact of the customs tariff on the Chinese economy will become very clear from August on the risk … Given the Purchasing Manager Index for July, I would like to say that there are some disturbing situations at the present time.”

During a high -level meeting on Wednesday, senior Chinese leaders did not refer to plans to stimulate a new new, although the country enhances subsidies to encourage people to have more children.

Bank of America analysts said in a report on Wednesday about the political meeting: If the United States and China are able to expand the scope of commercial truce, it is possible that it “reduces the desire to increase policy support” to the economy.

They pointed out that reading reading has removed the signals to interest rate discounts and provided a small hint of supporting the additional real estate market, while emphasizing the dangers of local government debt.

– Anik Pau of CNBC and Victoria Yu contributed to this report.