Country's economy to post steady rebound in 2nd half

China's economy is on track to post a steady rebound in the second half of the year despite downward pressures from a gloomy global economic outlook and uncertainties both at home and abroad, analysts and experts said.

While renewed COVID-19 outbreaks may threaten the pace of the recovery, the country's supply chain will experience less disruption, and policy stimulus will play a major role in boosting growth in the second half, they said.

Their comments came as factory activity in the manufacturing sector of China contracted unexpectedly in July due to softer demand after returning to expansion territory the previous month.

The official purchasing managers index, or PMI, for China's manufacturing sector posted a reading of 49 in July compared with 50.2 in June, data from the National Bureau of Statistics said on Sunday. A reading of 50 or higher indicates economic expansion, while a figure below 50 is a sign of contraction.

Zhao Qinghe, a senior statistician with the National Bureau of Statistics, said the reading came amid weakening market demand and called for more efforts to consolidate the recovery momentum in the manufacturing sector.

Ye Qing, a professor at Zhongnan University of Economics and Law in Hubei province, attributed the unexpected contraction to commodity price fluctuations, as the PMI for sectors such as textile and the processing of oil and coal stood in contraction territory.

With the government's effective measures to control the pandemic and stronger policy support, China's economy will likely expand by around 6 percent to 7 percent in the third quarter and eventually post full-year gross domestic product growth of around 4 percent to 5 percent, Ye said.

National Bureau of Statistics data showed that among 21 surveyed manufacturing sectors, 10 were in expansion territory in July. Ye said those sectors have benefited from recent stimulus measures that stabilized their growth.

The PMI for sectors including the processing of agricultural food and special equipment for manufacturing and automobile manufacturing was above 52 in July, sustaining their expansionary reading for two consecutive months, the NBS said.

China's nonmanufacturing PMI was at 53.8 in July, compared with 54.7 in June. The country's official composite PMI, which includes both manufacturing and services activity, came in at 52.5, compared with 54.1 in June, according to the NBS.

Zhou Lanxu contributed to this story.