China's manufacturing PMI unexpectedly fell to 49.5% in August

According to data released by the National Bureau of Statistics on August 31, China's Manufacturing Purchasing Managers Index (PMI) fell 0.2 percentage points to 49.5% in August compared with the previous month, and was in a contraction range for four consecutive months. Analysts said that in the context of unchanged domestic and foreign demand downturn, manufacturing industry is still facing downward pressure.

Before the release of data, the median estimated PMI of 7 organizations interviewed by the interface news showed that in August, the PMI of Chinese manufacturing industry was 49.8%. The PMI index is above 50, reflecting the overall expansion of the economy; below 50, reflecting the economic recession. Liu Xuezhi, senior analyst at the Financial Research Center of Bank of Communications, pointed out in the research report that PMI has not shaken off its weakness and its recovery is limited due to weak internal and external demand, especially the weak manufacturing expectations caused by the escalation of trade frictions between China and the United States.

Merchants Securities believes that in addition to trade frictions, the tightening of domestic real estate regulation may also bring uncertainty to the manufacturing industry. They pointed out in a report that the current focus of China's fiscal policy is still on tax reduction and fee reduction. Although it helps to improve corporate profit margin and restore household income, the growth rate of infrastructure investment may be at a low level, and the driving effect on short-term economic growth is weak. On August 23, in his report to the 12th meeting of the 13th Standing Committee of the National People's Congress, He Lifeng, Director of the National Development and Reform Commission, pointed out that economic development is facing new risks and challenges and maintaining stable and healthy economic development should be consciously aware of the long-standing structural and institutional contradictions and external shocks in China. The difficulty has increased.

"In the second half of the year, we should focus on doing our own work well, do a good job in the work of"six stability"in an all-round way, and ensure that all policies will be effective as soon as possible," He Lifeng said. Xiao Yunliang, senior macro-analyst at Minsheng Securities, said that manufacturing industry is an important driver of China's economic transformation and upgrading. The July meeting of the Political Bureau of the Central Committee clearly demanded that manufacturing investment be stabilized and that financial institutions be guided to increase medium-term and long-term financing for manufacturing industry and private enterprises, which will be conducive to the recovery of enterprise confidence. The data released by the National Bureau of Statistics on Saturday also showed that China's non-manufacturing business activity index recorded 53.8% in August, up 0.1 percentage points from last month. The comprehensive PMI index, which reflects the output change of the whole industry in the current period, dropped 0.1 percentage point to 53.0% compared with the previous month.