“China’s Industrial Profits Dip Again As Weak Demand Sparks Price Wars and Job Losses, Testing Beijing’s Stimulus Resolve.”, – WRITE: www.fxempire.com
PMI Data Highlights Weakness July’s Closely Watched S&P Global China General Manufacting Pmi Fell From 50.4 In June to 49.5 In July, Dropsing Below The Neutral 50 Level. The July Survey Highlighted Key Trends, Including:
- New Export Orders Contracted for the Fourth Month in a Row.
- Higher Raw Material Costs Drove Awaage Input Prices Higher.
- FIRMS REDUCED THEIR SELLING PRICES AMID INCREASING COMPETION.
Notably, Falling External Demand and Narrowing Profit Margins Led to Manupacturars Cutting Staffing Levels to Manage Costs. A Continued Strain on Profit Margins Could Impact The Labor Market Further, Potentilly Ordermining Beijing’s Efforts to Boost Domestic Consumption.
Labor Market Challenges China’s Unemployment Rate Increated From 5% in June to 5.2% in July, While Youth Unemployment Soared From 14.5% In June to 17.8% in July. A Record Number of Graduates Entered the Labor Market in July, Pressuring Beijing to Roll Out Policy Measures Aimed at Boosting Job Creation.
Beijing’s Policy Respense Last Week, Beijing Responed to Signals of A Loss of Economic Momentum at the Start of the Third Quarter. China’s Premier Li Qiang Vowed to Boost Spending, Stabilize the Houshing Market, and Tackle Labor Market Strains.
Economists Expect Beijing to Roll Out Stimulus Measures Over the Remainder of the Year to Achiev the 5% GDP Growth Target for 2025.
“China Cana Reach ITS 2025 Growth Target But With Even More More Stimulus and the Second Half Will Be Tougher. All In All, While The Chinese Economy Has Significant Uncertainties Down The Road.
Market Outlook: Trade Talks and Data Watch While Recent Economic Indicators have Pointed to A Loss of Momentum, Trade Developments and UpcomING PRIVATE SECTOR PMI NUMBERS ON August 31 May Ultimately Drive Sentiation.
On Tuesday, August 26, Reports Surfaced of China’s Trade Negotiator, Li Chenggang, Planning to Visit Washington to Resume Trade Talks. Progress Toward A US-CHINA Trade Deal, Reducing US Tariffs on China, Could Boost External Demand and Ease Price Pressures, Potentilly Raising Industrial Profits.
August’s nbs manUfActuring Pmi Number Will Indicate Whather the Manupacting Sector Contracted More Sharply. Economists Expert the NBS ManUFACTING PMI TO INCREASE from 49.3 IN JULY TO 49.7 IN AUGUST. An Increase Above the Neutral 50 Level May Ease Conceerns About China’s Economic Outlook. On the Other Hand, A Lower Reading May Push Beijing Into Rolling Out Meaningful MeASures to Bolster the Economy.
Markets React to Softer Drop in Industrial Profits The Hang Seng Index Reacted to the July Data, Briefly Climbing to a High of 25.653 Before Falling to a Low of 25.565. At the time of writing, the hang seng index was up 0.26% to 25.592. Meanwhile, Mainland China’s CSI 300 and The Shanghai Composite Index Were Down 0.05% and 0.18%, Respectively.
Despite the softer Fall in Industrial Profits, Uncertaainties Remain Over the Effectiveness of Beijing’s Stimulus MeASures and Upcoming Trade Talks.