China’s factory output contracts for fifth month: PMI at 49.4 in August; trade talks with US drag on

China's industrial production showed a slight improvement in August but remained in contraction for the fifth consecutive month, as per official figures released on Sunday, while trade negotiations with the United States persist before a new November tariff implementation.

The Purchasing Managers' Index, a crucial industrial output indicator, reached 49.4, according to the National Bureau of Statistics (NBS), showing a marginal increase from July's 49.3, as reported by AFP. Bloomberg analysts had predicted the index would reach 49.5.

The most recent figure above 50, indicating positive growth, was recorded in March.

NBS statistician Zhao Qinghe viewed the month-on-month improvement as indication that "overall economic prosperity continues to expand". "The business climate has improved," he said.

The NBS had previously attributed July's manufacturing difficulties to adverse weather conditions, including floods and high temperatures.

China's economic recovery post-pandemic has been challenging, facing issues including a property sector debt crisis, reduced consumption levels and high unemployment rates among young people.

The ongoing trade dispute with the United States, currently paused pending negotiations, has affected China's export-driven economy.

Both nations have extended their suspension of most reciprocal tariffs until November 10 as discussions continue.

On Friday, senior Chinese trade negotiator Li Chenggang emphasised the need for "equal dialogue and consultation" between both countries after completing a three-day US visit, according to China's commerce ministry statement.