China manufacturing activity slumps to 11-month low

China manufacturing activity slumps to 11-month low.

A decline in new orders caused China’s manufacturing activity to fall to an 11-month low in July, according to a preliminary survey by HSBC.

The bank’s Purchasing Managers’ Index (PMI) fell to 47.7 from 48.2 in June. A reading below 50 shows contraction. The HSBC reading has been below that level for the third month running.

Fears of a slowdown have been plaguing China’s overall economy, as data released earlier this month showed that China’s economic growth slowed in the April to June period, the second straight quarter of weaker expansion.
The world’s second biggest economy grew by 7.5% compared to the previous year, down from 7.7% in the period from January to March.

Demand for China’s exports has slowed recently, signaling bad news for China’s manufacturing and export sectors which have been the key drivers of the nation’s economic growth for the past few decades.

But China’s key markets such as the US and Europe have their own problems to deal with, as they wrangle with slowing economic growth. A slowing demand from key markets, paired with less domestic consumption could hurt growth in China’s manufacturing sector and impact China’s overall economic growth.

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