Official data released on June 30, 2023, reveals that factory activity in China contracted for the third consecutive month. This comes amid concerns over the country’s weak economic performance in April and May, with calls for additional measures to stimulate the world’s second-largest economy.
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In June, China’s factory activity contracted for the third consecutive month, further accentuating concerns about the sluggish growth of the world’s second-largest economy and potentially fueling demands for more stimulus.
According to the National Bureau of Statistics, the official Manufacturing Purchasing Managers’ Index (PMI) for June came in at 49.0, compared to 48.8 in May and 49.2 in April. The released data aligns with market expectations, as economists surveyed by Reuters forecasted a reading of 49.0.
A PMI reading above 50 indicates expansion, while a reading below 50 suggests contraction.
In early Friday trade, the CSI300 index, which tracks the largest Shanghai and Shenzhen-listed companies, reversed its losses and rose by 0.1%. Meanwhile, the Hang Seng Index remained flat.
The weaker-than-expected economic growth in April and May has led to increased calls for more proactive monetary measures to support China’s growth, as the anticipated post-Covid rebound fell short of expectations.
However, Chinese Premier Li Qiang stated on Tuesday that the country remained on track to achieve its annual growth target of around 5%, a modest goal considering China’s mere 3% growth last year, marking one of the weakest performances in almost fifty years.
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