China's factory activity unexpectedly contracted in July, marking the first decline in five months. This downturn follows a second-quarter rebound that had been powered by an export rush, which has now begun to unwind.
An official survey indicates that this slowing activity adds to signs of decreasing economic momentum. The declines suggest that economic weakness is becoming more entrenched.
Consequently, the official manufacturing purchasing managers index increases pressure on Beijing to roll out additional policy support to buttress growth.