China’s factory activity unexpectedly worsens as exports stumble

Factory activity fell to a six-month low in July as signs emerged that China’s exports are slowing despite a ‘tariff truce’ with the US

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An employee works in a factory which produces wind turbine towers in eastern China. China’s factory activity unexpectedly fell to a six-month low in July as signs emerged of a softening in exports. Photo: AFP

Published: 10:32am, 31 Jul 2025Updated: 10:33am, 31 Jul 2025

China’s factory activity unexpectedly deteriorated in July to a six-month low despite a tariff truce with the US, as early signs emerge that exports are slowing and weak domestic demand persists.

The official manufacturing purchasing managers’ index was 49.3, versus 49.7 in June, the National Bureau of Statistics (NBS) said on Thursday. The median estimate of economists surveyed by Bloomberg was 49.7. A reading below 50 indicates contraction.

The non-manufacturing measure of activity in construction and services fell to 50.1 from 50.5 last month, according to the statistics office. That compared with a forecast of 50.2.

In a statement accompanying the data release, the NBS blamed high temperatures, heavy rain, and flooding in some regions for disrupting the manufacturing industry, which it said entered “the traditional off-season” in July.

The PMI figures are the first official data available each month to provide a snapshot of the health of the Chinese economy.

China’s top leaders touted the nation’s economic strength at a gathering of the decision-making Politburo on Wednesday. That came after the country registered a record trade surplus in the first half of the year on soaring shipments to Southeast Asia and stabilising exports to the US.

China’s factory activity unexpectedly worsens as exports stumble

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Factory activity fell to a six-month low in July as signs emerged that China’s exports are slowing despite a ‘tariff truce’ with the US

Factory activity fell to a six-month low in July as signs emerged that China’s exports are slowing despite a ‘tariff truce’ with the US