China July factory activity suddenly slumps

In July, activity in Chinese manufacturing sector suddenly eased because orders cooled, while flooding disrupted business, an official poll revealed, thus contributing to fears that China’s economy will slow in the nearer months unless the government gets down to a huge spending spree.

While a similar private poll disclosed business picked up for the first time for 17 months, the actual growth was minor and the much larger official poll conducted on Monday suggested that China's overall industrial activity is still sluggish.

Both polls demonstrated persistently poor demand at home and also abroad. As a result, companies were forced to keep shedding jobs, even as Beijing vows to shut more industrial overcapacity, which could potentially lead to huge layoffs.

As for other Monday’s readings, they pointed to signs of apparent cooling in both the construction industry as well as real estate, that were major drivers behind better-than-expected economic growth during the second quarter.

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