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China’s official manufacturing PMI reached 49.3 in July, versus expected 48.9, while the official non-manufacturing PMI fell to 51.5, versus expected 53.
The manufacturing PMI improved slightly again in July, exceeding market expectations, while the non-manufacturing PMI missed its target due to weakness in real estate and weakening economic reopening, said Citi Research in a note.
The uneven “K-shaped” recovery may be in the early stages of convergence, with industrial momentum showing signs of bottoming out, however, the real estate sector is not out of the woods yet, although industrial activity seems to be stabilizing, it said.
The start of recovery in real estate indicators is seen the halfway point through the short-term up-cycle, it said.
Citi believed that the third quarter will see intense policy roll-out, with RRR and policy rate cuts, faster issuance of treasury bonds, and real estate easing measures expected and if effective, the efforts may be reflected in the data in Q3 – Q4, with the key being the sustained and stable implementation of policies, it said.