Manufacturing activity falls in China amid surge in electricity consumption

Shanghai [China], September 1 (ANI): With record heat waves causing a surge in electricity consumption in China, the manufacturing activity has come to a halt again in the country as repeated COVID-19 outbreaks took a toll on the economy and high power demand, triggering factory shutdowns.
China's manufacturing activities have turned offline due to excessive increase in the use of air conditioning, reported Nikkei Asia.
Moreover, the manufacturing Purchasing Managers' Index (PMI) ticked up to 49.4 from a 49.0 reading in July, according to the National Bureau of Statistics but remained below the 50-point mark that separated contraction from expansion.
China has also avoided an economic contraction in the second quarter earlier as well and repeated lockdowns and restrictions on movement only added to the ongoing economic slump in the country.
"The official PMIs show a further loss in economic momentum this month as the reopening boost waned and the property downturn deepened," said Julian Evans-Pritchard, senior China economist at UK-based research advisory Capital Economics. "We continue to think the economy will struggle to make much headway during the coming months."
As per Nikkei Asia, the closely watched gauge expanded for the first time in four months before it unexpectedly shrank again in July.
However, the non-manufacturing PMI, which includes the service sector, slipped to 52.6 in August from a 53.8 reading in the previous month.
Several analysts have doubled down on President Xi Jinping's signature zero-COVID policy at a time with Xi expected to seek an unprecedented third term at a Communist Party congress that will kick off on October 16.
The government has pledged a series of stimulus measures to boost the slumping economy, while the central bank has cut interest rates, including a mortgage-linked benchmark aimed at reducing the cost of home loans. China's property market, a key component of the economy has been staggering from one crisis to the next as a wave of bond defaults among debt-swamped developers led to scores of housing developments being left unfinished.
Meanwhile, China is suffering from a severe drought, with record heat waves causing a surge in electricity use from air conditioning. The soaring demand forced Sichuan province to suspend factory production to keep residential power supplies running.
The Zero covid policy of China, under which full or partial lockdowns were imposed in major centres, has had a negative impact on businesses. More severe lockdowns were implemented in the country as it continued to report more coronavirus infections this year.
Many people have been unemployed and underemployed, especially in service industries, due to the repeated lockdowns in different parts of the country.
The lockdowns have affected factory production, supply chains and caused goods shipments delays to the rest of the world and consumer prices in the country rose by 2.5 per cent due to the dampened demand. (ANI)