Factory activity in China has slumped to its weakest level since the country ended its zero-Covid policy in December, as its economic recovery continues to lose steam.
Asian markets tumbled following the release of the May data, even as a tentative agreement brokered by US President Joe Biden and House Speaker Kevin McCarthy to raise the US debt ceiling cleared a key hurdle on Tuesday evening. Hong Kong’s stock index dropped the most among regional markets Wednesday and is poised to enter bear market territory, which is defined as a decline of at least 20% from a recent peak.
China’s official manufacturing Purchasing Managers’ Index (PMI) dropped to 48.8 this month, down from 49.2 in April, according to data released by the National Bureau of Statistics on Wednesday. It was the second contraction in as many months. A reading above 50 indicates expansion, while anything below that level shows contraction.
The index, which mainly covers larger businesses and state-owned companies, was at its lowest level since December. Beijing scrapped most of its pandemic restrictions early that month, effectively ending its three-year-long zero-Covid policy.
The official non-manufacturing PMI, which measures sentiment in services and construction sectors, decreased to 54.5 in May from April’s 56.4, also the weakest level in four months.
Source: CNN
