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From slowing global demand to rising geopolitical tensions and a tentative post-Covid recovery, China’s manufacturers are facing some of the strongest headwinds in years.
The tale of three factories — spanning footwear and electronics — illustrates how manufacturers are experiencing a slowdown in the world’s second-biggest economy.
Factory activity, one of the main pillars of economic growth during the pandemic, has slowed for four consecutive months to July 31.
The Chinese Communist party’s politburo last week acknowledged the economy’s “tortuous progress” since the lifting of pandemic restrictions, vowing measures to “actively expand domestic demand”, such as spurring consumer spending.
“Things are pretty bad,” said Alicia García-Herrero, chief Asia-Pacific economist at French investment bank Natixis. Domestic demand “will only recover with a big stimulus”, she added, and “industrial production overall will underwhelm”.
This picture has been complicated by President Xi Jinping’s desire for “high-quality” growth, a strategy that favours tech industries over the vast manufacturing hubs that churn out basic consumer goods.
