Chinese factory activity is down, weighing on the weak economy | Business news

BEIJING (AP) — China’s manufacturing recovery after an anti-virus shutdown slowed in July, a survey showed on Sunday, adding pressure to the struggling economy in a politically sensitive year when President Xi Jinping is expected to seek a term extension power.

Factory activity was weighed down by weak global demand and anti-virus measures weighing on domestic consumer spending, according to the National Bureau of Statistics and the China Federation of Logistics and Procurement, an official industry group.

The monthly purchasing managers’ index from the Fed and the Office for National Statistics fell to 49 from 50.2 in June on the 100-point scale, where numbers below 50 indicate a decline in activity. Sub-measures of new orders, exports and employment declined.

“Downward pressure is great,” economist Zhang Lijun said in a statement released by the Federation. “The impact of the epidemic is still growing.”

The ruling Communist Party stopped short of its official economic growth target of 5.5% this year after output fell in the three months ended June compared with the previous quarter.

The slowdown, which increases the risk of politically volatile job losses, adds to Beijing’s problems ahead of a ruling party meeting in October or November, when Xi is expected to try to break with tradition and hand himself a third five-year term as party leader. .

In a statement Thursday, party leaders pledged to “strive for the best results” but did not mention the annual growth target announced in March.

The party has promised tax breaks and other aid to help entrepreneurs after virus controls temporarily shut down Shanghai and other industrial centers starting in late March.

The port of Shanghai, the world’s busiest, says activity has returned to normal, but factories and other companies are operating under anti-virus controls that are limiting their workforce and hampering production.

The manufacturing index fell to 49.8 from 52.8 in June. New orders fell 1.9 points to 48.5. New export orders fell by 2.1 points to 47.4.

China’s leaders have avoided large-scale stimulus spending, perhaps for fear of reigniting a debt they see as dangerously high.

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