China factory activity stalls July
Analysis based on 6 articles · First reported Jul 30, 2026 · Last updated Jul 30, 2026
The expected stagnation in factory activity signals continued weakness in China's domestic demand, which may weigh on investor sentiment and commodity prices. However, strong export growth provides a buffer, reducing the likelihood of aggressive stimulus that could boost markets.
China's factory activity growth likely stagnated in July, with the official manufacturing PMI expected to drop to 50.0 from 50.3, according to a Reuters poll of 31 economists. Weak domestic consumption and cost pressures from the Middle East War offset strong global demand for Chinese goods, particularly in high-tech and AI-related sectors. The National Bureau of Statistics will release the data on Friday. China's GDP expanded at its slowest pace in over three years in Q2, weighed by soft retail sales and weak investment. Bank lending growth has been sluggish, prompting the Bank of China to issue window guidance to banks to increase lending. The Politburo is expected to meet by end of July to discuss economic matters, but analysts do not anticipate major stimulus. Exports surged 27% year-on-year in June, reducing urgency for stimulus. Industrial profits grew 15.1% in June, slowing from 21.1% in May. The private sector RatingDog manufacturing PMI is expected to dip to 51.5 in July from 51.7 in June.
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