China's factory activity unexpectedly contracts in July as export rush fades

LIUZHOU, CHINA - JULY 25: Robotic arms assemble auto parts at the workshop of Guangxi Liuzhou Zhuotong Auto Parts Co., Ltd. on July 25, 2026 in Liuzhou, Guangxi Zhuang Autonomous Region of China.He Huawen | Visual China Group | Getty ImagesChina's factory activity unexpectedly contracted in July for the first time since February, as the export rush that powered a second-quarter rebound began to unwind, piling pressure on Beijing to boost domestic demand.The official manufacturing purchasing managers' index fell to 49.2 from 50.3 in June, National Bureau of Statistics data showed Friday, dropping below the 50-point threshold that separates expansion from contraction. Economists' median forecast had pegged PMI at 50. PMI ended a 3-month expansion streak that was propped up by exporters rushing shipments ahead of U.S. tariff increases. It was the weakest reading since February. The print lands a day after the country's top policymakers acknowledged "difficulties and challenges facing the economy" at its mid-year meeting, pledging to accelerate fiscal spending and roll out "incremental policies" to shore up growth in the second half. China's economy in the second quarter expanded 4.3% ...