China’s Caixin PMI Services increased from 51.2 to 52.1 in July, surpassing the expected 51.4 and remaining in expansionary territory for the 19th consecutive month. Meanwhile, PMI Composite fell from 52.8 to 51.2, but still marking the ninth consecutive month of expansion.
Wang Zhe, Senior Economist at Caixin Insight Group, noted that while the services sector saw improvement, manufacturing faced greater pressure. “The former outperformed the latter in terms of supply, demand and employment,” Wang said. Despite this, composite prices remained weak, especially on the sales front, which further squeezed company profit margins. Market optimism improved, although it remained at a low level.
The latest data revealed that China’s real GDP growth in Q2 slowed to 4.7% yoy, significantly lower than market expectations. This slowdown suggests that it will be challenging for the country to meet its annual growth target of around 5%. Wang said the primary issues remain insufficient effective domestic demand and weak market optimism.
