China's purchasing managers' index (PMI) for the manufacturing sector in July indicated an improving economic structure despite a reading of contraction due to seasonal factors, with equipment and high-tech manufacturing maintaining expansion, official data showed.

The purchasing managers' index (PMI) for China's manufacturing sector stood at 49.2 this month, down 1.1 percentage points from June, according to the National Bureau of Statistics. A reading above 50 indicates expansion, while a reading below 50 reflects contraction.

NBS chief statistician Huo Lihui attributed the fall to multiple factors. "Factors include a relatively high base from the rapid manufacturing growth in the previous period and the traditional off-season for production in some manufacturing industries," said Huo.

Wen Tao, an expert with the China Logistics Information Center, said historical data reveal that manufacturing PMI tends to decline in July in most years, affected by seasonal factors such as high temperatures, heavy rain and typhoons.

Despite the overall decline, equipment manufacturing and high-tech manufacturing continued to play a supporting and leading role, with their PMI readings at 51.4 and 53.3, respectively, significantly higher than the manufacturing sector as a whole, Huo noted. New growth drivers have sustained sound momentum with strengthened risk-resistance capacity, effectively offsetting fluctuations in traditional industries, Wen said.

Driven by summer holiday consumption, residents' leisure, entertainment and travel increased, with business activity indices for air transport, accommodation, and the culture, sports and entertainment industries rebounding markedly month on month, Huo said.

Business expectations remained upbeat in July. The business activity expectation index for the construction sector rose to 51.8, up from 51.1 in June, while that for the service sector came in at 56, unchanged from the previous month, the data showed.

"Enterprises in the manufacturing sector are generally optimistic about market development," Huo said, citing the sub-index of 54.1 for production and business expectations.

Looking ahead, manufacturing is expected to enjoy a sound foundation for stabilizing and rebounding in August, Wen said.

As the impact of extreme weather fades, enterprise capacity and supply chain operations in previously affected areas will return to normal, while policies including the six major infrastructure networks initiative, large-scale equipment upgrades and consumer goods trade-in programs, will continue to boost effective investment and empower the sector's transformation and upgrading, the expert added.

A meeting held by the Political Bureau of the Communist Party of China Central Committee stressed accelerating the transition from old growth drivers to new ones, vowing to promote sustained innovation-driven, high-quality and sound economic development, ensuring a good start to the 15th Five-Year Plan period (2026-2030).

It also called for timely introduction of pragmatic and effective incremental policies, amid efforts to step up counter-cyclical adjustments and expand domestic demand. (Xinhua)