China’s factory activity shrinks for fifth month in August

A worker wearing a face mask works on a production line manufacturing bicycle steel rim at a factory, as the country is hit by the novel coronavirus outbreak, in Hangzhou, Zhejiang province, China March 2, 2020. China Daily via REUTERS/File Photo

BEIJING  – China’s manufacturing activity contracted for a fifth straight month in August, but at a slower than expected pace, an official factory survey showed on Thursday, maintaining pressure on Beijing to step up policy support for the stalling economy.

The official purchasing managers’ index (PMI) rose to 49.7 from 49.3 in July, according to the National Bureau of Statistics, staying below the 50-point level demarcating contraction from expansion. The reading was above a forecast of 49.4.

The Chinese economy risks missing Beijing’s annual growth target of around 5 percent as it contends with a worsening property slump, weak consumer spending and tumbling credit growth, leading major banks to downgrade their economic growth forecasts for the year.