According to UOB Group Economist Ho Woei Chen, there has been a divergence between Caixin and official manufacturing PMIs in China, while the official nonmanufacturing PMI saw a marginal increase in August. However, both the manufacturing and nonmanufacturing sectors experienced weakening employment and prices during this time.
Analysis of the Situation
The signs of weaker activities in the manufacturing sector indicate a challenging road ahead for China to maintain the 5.0% growth rate seen in the first half of 2024. It is likely that China will miss its official growth target of “around 5.0%” for the year. UOB Group Economist Ho Woei Chen maintains a forecast of 4.9% GDP growth for 2024, with risks still leaning towards the downside.