China's Economic Struggles: Navigating Uncertainties Amid Declining Manufacturing

China's manufacturing sector faced contraction for the fifth consecutive month in August, as revealed by official data, pointing to sustained uncertainties in trade negotiations with the U.S. While domestic demand weakens, policymakers are eyeing measures to navigate the hurdles.

The official Purchasing Managers' Index (PMI) slightly increased to 49.4 in August from July's 49.3, but it stayed below the crucial 50-mark, indicating continuing contraction. Economists attribute these challenges to factors like weakened exports under U.S. tariffs, property downturns, and rising job insecurities. Such pressures pose significant risks to China's ambitious growth target of "around 5%" by 2025.

Amid these setbacks, the non-manufacturing sector showed improvement, slightly increasing to 50.3 from 50.1. However, the economic momentum of China has slowed, driven mainly by weak domestic demand and a cooling property sector. The outlook remains uncertain, heavily dependent on export durability and potential supportive fiscal measures in the coming quarters.

(With inputs from agencies.)