China’s factory sector hit an unexpected slump last month, raising concerns about slower growth in the second-largest global economy.
According to the National Bureau of Statistics, The Chinese government’s official purchasing managers’ index hit 50.0 in July, down from 50.2 in June. Any figure below 50 represents a deceleration in manufacturing, which then affects exports.
Another survey carried out by a Chinese media group showed manufacturing PMI had dropped to 47.7 in July, the lowest rate in two years, and the fifth month in a row that the index has fallen below 50.
Poor manufacturing activity is one indicator that the overall condition of China’s economy may be struggling. In an attempt to support growth, officials have cut interest rates, and reduced the amount of spare cash banks are required to hold, as well, certain infrastructure projects have been accelerated.