Chinese industry is losing momentum again

In China, the industry is losing momentum again after its strong recovery from the Corona crisis. This month, factory activity fell to its lowest level since the start of the corona pandemic, data from the Chinese statistics agency shows. The authority blamed, among other things, extreme weather for the decline. According to the statistics agency, the so-called purchasing managers' index (EMI) fell to 50.4 in July. In the previous month this value was still 50.9. An EMI over 50 is considered a sign of economic growth, values below that are seen by experts as a signal that a country's economy is shrinking. Economists pay particular attention to the development of export business. "The most alarming signal is the new export orders index, which is at its lowest level since July last year," said Zhiwei Zhang, chief economist at asset manager Pinpoint Asset Management. Zhao Qinghe from the statistics bureau said that overall the Chinese economy is still growing, but that it is slowing down. Some companies in China used July to service their equipment, Zhao said. Increased raw material and logistics costs and supply bottlenecks in world trade contributed to the slowdown. In combination with the "effects of extreme storms such as locally high temperatures, floods and natural disasters", this has led to a "relative weakening" of growth in the manufacturing sector. Zhao did not mention any specific severe weather disasters. In July, the central Chinese province of Henan suffered devastating floods caused by heavy rain. More than 70 people were killed and the property damage amounted to billions of yuan. In Henan, among others, Foxconn operates plants that manufacture iPhones.