China’s Manufacturing Recession Continues in August

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China’s official PMI reading for August came in at 49.5, its fourth month of contraction. The government made the announcement along with several others about August economic performance. The trade war with the United States has started to bite hard, without question.

Government news agency Xinhua reported:

The purchasing managers’ index (PMI) for China’s manufacturing sector dipped to 49.5 in August from 49.7 in July, the National Bureau of Statistics (NBS) said Saturday.

A reading above 50 indicates expansion, while a reading below reflects contraction.

A breakdown of the data showed manufacturing production maintained expansion, but market demand moderated amid a complex economic environment, NBS senior statistician Zhao Qinghe said.

The sub-index for production edged down 0.2 points to 51.9 in Aug., signaling continuous expansion but at a slower pace, while that for new orders was down by 0.1 point to 49.7. The new export order sub-index, however, rebounded by 0.3 points to 47.2.

Among the 21 industries surveyed, 17 were in the expansion zone, up from 12 in July, and 11 recorded month-on-month increases.

The reading also showed industrial upgrading continued apace, with high-tech manufacturing and consumption-related sectors maintaining rapid expansion, Zhao said.

Saturday’s data also showed the China’s composite PMI edged down 0.1 point to 53, which had remained in a range of 53-53.4 for five consecutive months and indicated steady business expansion.

There have been halting efforts at new trade talks, but nothing concrete enough to hope with the issues between the two nations will end soon, and certainly not within the next several months. There is a great deal of debate about whether the Chinese central government is prepared to handle a full-scale recession and an economy worse than that after the 2008-2009 financial crisis.


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