Da Ji Yuan on August 1 reported that China’s unstable economy tumbled even more at the start of the second half of this year as factories unexpectedly switched back to the slow lane, top tech firms had the worst quarterly records, and the property market downturn deepened. Official survey data also showed a new wave of unemployment in the country.

According to the report, data from a private poll by Caixin on Monday showed an unexpected contraction last month in China’s manufacturing activity after surging in June when the COVID lockdowns were lifted.

Caixin Manufacturing Purchasing Managers Index (PMI) fell to 50.4 in July from 51.7 in June. This analysis came on top of an official survey on Sunday from the Chinese National Bureau of Statistics, indicating an actual contraction in the industry last month.

The 50-point mark PMI separates growth from contraction every month.

In addition, Nikkie Asia reported that China’s tech giants Alibaba Group Holding and Tencent Holdings will post negative quarterly revenue growth for the first time.

The outlet, citing Refinitiv data, reported that Alibaba would post its second-quarter results on August 4, with expected revenue of $30 billion, a 1.22% decline over the same period last year. Meanwhile, Tencent will likely drop 2.1% in revenue to $20 billion. 

Alibaba rivals JD.com and Pinduoduo are expected to post their slowest revenue growth at 3.9% and 2.3%, respectively.

Regarding China’s property market slump, a survey on Monday by China Index Academy, one of the country’s largest independent real estate research firms, showed that the average price of new residential buildings in 100 cities last month stopped rising and started falling month-on-month. 

Property sales by floor area in 17 cities tracked by the company plummeted 33.4% in July month-on-month, compared with an 88.9% post-lockdown surge in June.

Liu Siliang, a senior researcher at the Rushi Advanced Institute of Finance, told MSN that the real estate sector and related industries accounted for about one-third of China’s GDP. Therefore, the property market downturn is taking a toll on the economy.

Data from the statistics bureau show that output in the property industry contracted 7% in the second quarter from a year earlier, the worst reading among all sectors.

As businesses in China are not performing well, the labor market will also be affected due to their willingness to absorb employment. 

Caixin survey data showed that in July, China’s Manufacturing Employment Index saw a drop in 4 consecutive months, hitting its lowest since May 2020. Firms attributed the staff cuts to weak sales, cost reduction, and non-replacement of voluntary leavers.

Xu, general manager of a furniture maker in Jiangsu province, told Reuters, “We’ve shut down at least 10% of the factories in Jiangsu so far, and more than 80% of employees have been laid off.”

He added that his company’s sales are now just half the annual figure of $14.8 million, despite market improvement after the COVID lockdown.

In addition, Da Ji Yuan noted that nearly 11 million college students had graduated this year, which will further exacerbate the unemployment problems in China.

Data from the National Bureau of Statistics of China reported on July 15 that China’s youth jobless rate in June rose to the highest of 19.3%, with nearly one out of five young job applicants being unemployed.

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