Caixin PMI contraction sparks talk of supports for manufacturing

Stronger policy supports are likely to unfold in the coming months to anchor China's manufacturing activity－and alleviation of the cost pressure being faced by small businesses and boost to infrastructure investment will likely be under the spotlight, experts said on Wednesday.

They made the comments after a private survey showed China's manufacturing sector posted its first contraction over the past 16 months in August, as per its parameters, as the resurgence in local COVID-19 cases hampered production and dampened demand.

The Caixin China General Manufacturing Purchasing Managers' Index came in at 49.2 in August, down from 50.3 in July and dropping through the 50-mark that separates expansion from contraction for the first time since April 2020, media group Caixin said in a report on Wednesday.

"The latest COVID-19 resurgence has posed a severe challenge to the economic normalization that began in the second quarter of last year," said Wang Zhe, senior economist at Caixin Insight Group.

The reading came after China's key economic data like retail sales and industrial output missed market expectations in July.

The official PMI, rel