The Purchasing Managers' Index (PMI) for manufacturing, which shows China's economic trends, has indicated a contraction for three consecutive months. Although the United States and China have suspended their tariff war, China's economy has yet to recover, suggesting that additional economic stimulus is needed.
China's National Bureau of Statistics announced on the 30th that the manufacturing PMI for June was recorded at 49.7, up 0.2 points from the previous month. This figure matches the estimate by Reuters and, although it indicates a rising trend since April, it still remains below the baseline of 50. The PMI is an economic indicator compiled based on a survey of corporate purchasing managers, where a value above 50 indicates economic expansion and a value below 50 indicates economic contraction.
The PMI for the non-manufacturing sector, including construction and services, rose to 50.5 in June, an increase of 0.2 points from the previous month. By industry, the construction sector's business index rose 1.8 points to 52.8, while the services sector's business index fell 0.1 points to 50.1. The combined PMI for China's manufacturing and non-manufacturing sectors in June increased by 0.3 points to 50.7 compared to last month.
Experts noted that while the manufacturing PMI is still in a contraction phase, the situation is gradually easing, although external risk factors have yet to be resolved. Huang Zhichun, an economist at Capital Economics, stated, "This PMI shows that the economy of China, the world's second-largest economy, has recovered to a certain extent," adding, "However, the ongoing conflict between China and the West is likely to continue to pressure exports, and deflationary pressures remain. "
Experts unanimously agreed that additional fiscal stimulus is essential for China to achieve its growth target of 5% set for this year. Tommy She, head of Greater China research at OCBC Bank in Singapore, told CNBC, "We expect the expansion of voucher payments to promote consumption, strengthening durable goods replacement programs, and additional issuance of government bonds in the second half of the year. These measures could enhance the fiscal execution capabilities of both central and local governments."