China Factory Slowdown Adds To Economic Woes

Manufacturing

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A survey showed China's factory activity slowed in May. Signs show the economic rebound is slowing after anti-virus controls ended. Wednesday's survey revealed the deceleration.

The national statistics agency and an industry group published a monthly purchasing managers' index. The index decreased from 49.2 in April to 48.4. This index uses a 100-point scale and numbers below 50 mean activity is decreasing.

Chinese manufacturers are not doing well because there is not as much demand for their products worldwide. This happened after banks in the US, Europe, and Asia raised interest rates to try to stop prices from rising too much.

Chinese consumers started spending again at home once restrictions on travel and business were lifted in December due to the pandemic. However, the recovery has not been as strong as predicted.

The economy grew by 4.5% in the first quarter compared to last year. Last quarter, it was 2.9%. The Communist Party wants it to be around 5% yearly. To make that happen, the growth has to increase in the upcoming quarters.

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