Nouvelle alerte sur l’économie chinoise : l’activité de l’industrie manufacturière chute brutalement

Nouvelle alerte sur l'économie chinoise : l'activité de l'industrie manufacturière chute brutalement

The bad news about the health of the Chinese economy follows one another. So what China saw its growth collapse in the second quarter to a near standstill, activity in the manufacturing industry slows down sharply. After recovering in June following the lifting of lockdowns, it unexpectedly contracted in July against the backdrop of new health fears, a gloomy economic outlook and a drop in demand. This follows from the publication, this Sunday, of the manufacturing PMI index of the National Statistics Office. The latter effectively fell to 49 in July from 50.2 the previous month. Therefore, it falls below the threshold of 50 that separates growth from activity contraction. The surprise is significant. Indeed, analysts polled by Reuters had expected an improvement to 50.4. This is the weakest performance of this index in the last three months. The subindices for production, new orders, and employment are all below 50.

“The level of economic prosperity in China has declined, the fundamentals of recovery still need to be consolidated,” Zhao Qinghe, chief statistician with the National Bureau of Statistics, said in a statement.

According to him, the reasons for this fall are multiple: “traditional low production season, insufficient release of market demand and the decline of industries with high energy consumption.” One of the main factors behind this relapse is the continued contraction of activity in the oil, coal and foundry sectors.

The manufacturing sector continues to face high commodity prices, which reduce profit margins, while export prospects are weak due to fears of a global recession. Zhao Qinghe added that sharp swings in commodity prices have prompted some companies to take a wait-and-see approach, “weakening buying intentions.”

Decrease in demand

The proportion of companies saying market demand is insufficient also increased for four consecutive months, the statistician said, noting that this is the “main difficulty” for manufacturers. This weakness in demand is hampering the recovery, notes Bruce Pang, chief economist at Jones Lang Lasalle Inc, in a research note: “Third-quarter growth could face greater challenges than expected as the recovery is slow and fragile. . »

Chinese growth collapses and almost stalls in the second quarter

Despite the partial lifting of Covid-related restrictions in major cities like Shanghai and Beijing, the country’s lockdowns have worried businesses and consumers.

Especially since the authorities do not seem to want to abandon the zero Covid policy. At a Politburo meeting this week, officials hinted that fighting the pandemic remained the priority rather than achieving economic and social goals.

Chinese leaders had originally set a full-year GDP growth target of around 5.5%, but with economic growth down just 0.4% in the second quarter, analysts say that is unlikely to be met. achieve this goal.

China’s non-manufacturing PMI also fell to 53.8 points in July from 54.7 in June, according to data from the National Bureau of Statistics on Sunday. This follows policies aimed at boosting consumption and the resumption of construction activities, according to the same source.

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IN JAPAN, INDUSTRIAL ACTIVITY REBOUNDED IN JUNE

Japanese industrial production rebounded strongly in June according to figures published on Friday, mainly due to the effect of the lifting of the Shanghai confinement, which had caused the worst drop in two years in Japanese manufacturing activity in May. This indicator rebounded 8.9% in June in one month, according to a first estimate from the Ministry of Economy, Trade and Industry (Meti).

It had fallen 7.5% in May as a result of supply chain disruptions linked to health restrictions in China. The consensus economists at the Bloomberg agency certainly expected a rebound in June, but significantly less significant (+4.2%). Shipments of Japanese manufactured products also recovered in June (+4.6% in one month), as well as inventories (+2.1%), according to the Meti. The automotive industry, electrical machinery, information technology and electronics were the sectors that contributed the most to the recovery of Japanese industrial production in June, according to the ministry. Japanese manufacturers surveyed each month by Meti expect further increases in production in July-August.

(with AFP and Reuters)