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China’s manufacturing activity retreats in July

China’s manufacturing activity retreated slightly in July compared to the previous month. That’s according to official data released on Aug 1. PMI posted 50 percent, two percentage points lower than in June. The reduced figure comes as non-manufacturing sector activity further picked up steam last month.

The high-tech industry remained in expansion territory, with growth in the sector rising for the third straight month to a PMI of 54.8 percent in July.

Consumption manufacturing PMI, though, was 51 percent, one percent higher than the entire manufacturing PMI.

However, the index for equipment manufacturing retreated due to a decline in exports.

Analysts say the fluctuation was within a normal range, indicating that the economic fundamentals are stable.

A senior statistician attributed overall reduced output to the weather and machinery upgrades.

“It has been effected by the recent high temperatures and rainy days, with some corporations also reducing production for facilities maintenance and improving technology. So corporations’ activities have been slowed down,” said Zhao Qinghe, statistician of National Bureau of Statistics.

Activity in the non-manufacturing sector continued to pick up steam in July, with PMI expanding to 53.9, up from 53.8 for June.

“The sub-index of business activities in the service sector was 52.8 percent this month, with a rise for the second month. It indicates that the business volume of the service sector is growing,” Zhao said.

That’s as the summer vacation has stimulated consumption, as well as tourism and transport services.

“Consumer demand is playing a more important role in supporting the whole process of economic operation,” said Cai Jin, vice-president of China Federation of Logistics and Purchasing.

As for the construction industry, the sub-index of business activities has risen for three consecutive months. Civil engineering construction is also showing active signs of recovery, which analysts say lays a foundation for the stable growth of fixed-asset investment in the second half.