Under pressure from China's strict zero-Covid measures, Chinese industrial sentiment took an unexpected turn for the worse in July. The official Purchasing Managers' Index (PMI) fell from 50.2 in the previous month to just 49 points, according to the statistics office in Beijing.
Such a value below the 50 mark on the important economic barometer indicates a decline in industrial activity in China. Experts had actually expected a value of just over 50 points, similar to the previous month.
As the rest of the world tries to live with the coronavirus, China maintains a zero-tolerance policy to nip any outbreak in the bud. The economic recovery is suffering from the strict measures, which are less effective against the highly contagious omicron variant. In the second quarter, the world's second largest economy grew by just 0.4 percent compared to the same period last year. That was the weakest reading since the pandemic began.
The government actually wanted to achieve growth of 5.5 percent this year, but this seems less and less realistic. Due to the Covid restrictions and the ongoing real estate crisis in China, experts only expect growth of around four percent.
