China's factory activity unexpectedly shrinks in July as demand sags

An employee works on the production line manufacturing pipe-fitting valves at a factory in Wenzhou, Zhejiang province, China, on Jan 14, 2026. (File photo: Reuters/Josh Arslan) 31 Jul 2026 10:23AM BEIJING: China's factory activity unexpectedly slipped into contraction in July, pressured by shrinking new orders that reinforced concerns over slowing economic growth, weak demand at home and elevated production costs.The official manufacturing purchasing managers' index (PMI) fell to 49.2 from 50.3 in June, below the 50-mark separating growth from contraction and hitting a 5-month low, according to a survey by the National Bureau of Statistics. It missed the median forecast for 50 in a Reuters poll.The non-manufacturing PMI, which includes services and construction, also contracted, declining