Chinese manufacturing sector slows unexpectedly in July, as factories report a dip in orders adding to consensus global growth is decelerating.
The optimism a month ago has now been replaced with caution, as ongoing COVID-19 outbreaks, and indications businesses are beginning to reduce activity in the face of persistent concerns of a global recession, stymie China's economy.
The prospect of a global slowdown as central banks from the US and UK to Australia and across Europe tighten monetary policyMs Qiao warned “fragile domestic demand” will weigh on the performance of the Chinese economy in the second half of 2022, while at the same time the People’s Bank of China, the country’s central bank, has indicated it will be hesitant to stimulate the economy further.
Last week, Chinese leaders “all but acknowledged that the country would miss its annual growth target for this year as it stayed the course on strict COVID-19 policy,” NAB said on Monday in a note to clients. The decline in manufacturing comes at a perilous time for the global economy, for which China has traditionally acted as a vital growth engine.
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