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- China's economic woes are mounting, with more negative news coming in every week.
- The nation's manufacturing activity shrank for the fifth straight month, the latest data show.
- Economists have slashed their China growth forecasts for 2023 and 2024.
China's manufacturing sector contracted for a fifth straight month in August, indicating troubles for the world's second-largest economy are far from over.
The latest reading for the nation's manufacturing purchasing managers' index, or PMI, came in at 49.7 — below the 50 level that divides expansion and contraction.
Factories in the Asian nation have been struggling for months because of a slump in global demand as well as reduced domestic consumer spending.
Manufacturing PMI figures for August actually exceeded the expectations of analysts polled by Reuters and may signal a slight uptick in performance – though as long as the figure shows contraction, China's growth forecasts will remain subdued.
"It could be worse. Flatlining is not plunging," Robert Carnell, chief economist at ING Group, told Bloomberg.
Economists have cut their China GDP forecasts for both this year and next – expecting the economy to grow just 4.5% in 2024, well below the government's 5% target.
And the country's policymakers are under increased pressure to intervene in its stumbling economy.
Beijing has lowered its official GDP target for 2023 to just 5% in March and has responded to signs of stuttering growth by cutting stamp duty taxes, loosening housing market restrictions, and slashing key interest rates.
But these measures have fallen short of the massive amount of stimulus it would take to revive its ailing industries – including its enormous, debt-ridden property sector.
China's property sector makes up about 30% of the country's overall output. Since 2021, more than 50 Chinese real-estate firms have collapsed, and the consequences have reverberated around global markets throughout.