Mint Quick Edit | Self-goals had a role in China's slump
China’s purchasing managers’ index (PMI) for manufacturing shows that the world’s factory is sputtering. It logged a third month of contraction in a row this July, with a reading of 49.4, which is under the 50 mark that separates it from expansion.
Consumer demand in China has been in a prolonged slump amid the deflation of its property sector, which accounts for a major chunk of people’s wealth. As property values have dropped, their spending has diminished.
Deflationary forces in various markets have hurt the pricing power of businesses, even as investments from the West decline. Some of the blame lies with Beijing’s policy framework, which began giving the private sector a hard time a few years ago.
Sure, its central bank has cut interest rates and the ruling party has pledged to step up efforts to support growth, which slowed to 4.7% in the second quarter from 5.3% in the first. With the West barricading many of its exports, however, its economic prospects may fail to brighten.
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