BEIJING: China’s manufacturing activity fell again in August, but its industrial upgrades continue to keep pace as the country strives to shift its economy’s focus to highly productive industries.
The purchasing managers’ index (PMI) for the sector dipped to 49.5 in August from 49.7 in July, below the 50-point mark that separates expansion from contraction, National Bureau of Statistics (NBS) data showed on Saturday.
A breakdown of the data showed that manufacturing continued to expand, but market demand was suppressed amid a complex economic environment, according to NBS senior statistician Zhao Qinghe.
The sub-index for production dropped by 0.2 points to 51.9 in August, indicating that expansion continued but at a slower pace, while that for new orders shed 0.1 points to 49.7. The new export order sub-index, however, climbed by 0.3 points to 47.2.
Among the 21 industries surveyed, 17 were in the expansion zone, up from 12 in July, and 11 recorded month-on-month PMI increases.
NBS data also showed industrial upgrading continued, with high-tech manufacturing and consumption-related sectors maintaining their expansion rate, Zhao said.
The PMI of high-tech manufacturing and consumer-good industries stood at 51.2 and 50.9, respectively, exceeding the overall manufacturing activity index by 1.7 and 1.4 points.
The PMI for the non-manufacturing sector hit 53.8 in August, up from 53.7 in July.
Service sector activity leveled slightly, with the sub-index down 0.4 points to 52.5, as adverse weather conditions took a toll on such industries as airlines, hotels, catering and tourism.
But the sub-index of service-sector business expectations, which gauge companies’ confidence over prospects of future operations, climbed by 0.7 points to 59.8.
Saturday’s data also showed China’s composite PMI inched down by 0.1 points to 53, which has remained in a range of 53 to 53.4 for five consecutive months, indicating steady business expansion.
The country has ramped up measures to support economic growth and minimize downside risks. These include lowering the costs of financing through reform of the loan prime rate and a policy package to encourage consumption.
Warning of downward pressures on economic growth, economists Yi Huan and Liang Hong advised the government to make counter-cyclical adjustments in a timely manner and moderately loosen monetary policy for the rest of the year.