The world’s second-largest economy, China, is facing challenges as factory activity continues to contract for the second month in a row. In June, the official manufacturing purchasing managers’ index (PMI) remained at 49.5, which is below the 50 mark that indicates expansion in activity. This index reflects the sentiment of factory owners and is a key indicator of manufacturing activity in China.
Despite this contraction, the new manufacturing export order subindex remained unchanged at 48.3 in June. A reading above 50 typically signifies expansion, while a reading below indicates contraction. On the other hand, the non-manufacturing PMI, which measures sentiment in the service and construction sectors, fell to 50.5 in June from 51.1 in May but still remained in expansion territory for the sixth consecutive month.
The delayed third plenum is set to take place in Beijing in two weeks, where top Communist Party officials will convene. This gathering is eagerly awaited as major economic strategies for the next five to ten years are expected to be unveiled. The third plenum is a traditional forum for presenting significant economic plans and developments that will have a significant impact on China’s economy and its global standing.