NewsSOS
China's factory sector contracted unexpectedly in July, as the export rush that powered a second-quarter rebound began to unwind, the release showed. A demand slump and typhoon disruptions drove the reversal.
Contraction catches markets off guard The July reading was not anticipated. During the second quarter, manufacturers had accelerated exports at a pace that lifted factory output and masked softer underlying demand.
That effect has started to fade, leaving the actual demand picture more visible. Typhoons added a weather-driven drag alongside the demand weakness.
The combination meant July carried both a structural headwind from unwinding front-loaded shipments and an acute disruption from severe weather hitting at the same time.
Keep reading