China's Slowing Growth Momentum Spurs Policymakers and PBoC In Action

Li Chen
03 Aug, 2026
Hong Kong

Stocks in China struggled on Monday amid growing evidence of a macroeconomic slowdown, and investors looked to policymakers for additional support. 

The Hang Seng Index edged up 0.1%, and the mainland-focused CSI 300 Index decreased 0.7% as investors reacted to the latest update on the manufacturing survey. 

The RatingDog China Manufacturing PMI eased to a four-month low of 50.9 in July from 51.7 in June, said the S&P Global. 

The private survey indicated a slowdown in new orders growth, focusing more on export-driven medium- and large-sized companies. 

New orders advanced for the 14th consecutive month, and input price inflation eased for the third consecutive month; however, output prices held steady for the sixth consecutive month. 

However, business sentiment improved at export-driven companies supported by expectations of stronger demand, new product development, and enlarged production capacity. 

On Friday, the National Bureau of Statistics said the official manufacturing PMI in July eased to 49.2 from 50.3 in June. 

China's official gauge of factory activities, which has a larger share of state-controlled large enterprises, dropped into contraction and ended a four-month growth streak.

Weakness in domestic demand and new order growth raised expectations for additional policy support from Beijing. 

Separately, the People's Bank of China reiterated its commitment to supporting the economy, maintaining ample liquidity, and urging financial institutions to ensure balanced credit growth.     

 

China Indexes and Stocks 

The Hang Seng Index edged up 0.1% to 25,900.24, and the mainland-focused CSI 300 Index fell 0.7% to 4,554.62. 

Financial stocks led decliners in Hong Kong and Shanghai trading on Monday. 

ICBC decreased 1% to HK $7.44, and the Agricultural Bank of China declined 2.5% to HK $6.16. China Construction Bank also eased 1% to HK $9.13.

CXMT advanced 2.7% to ¥55.43, SMIC fell 4.8% to ¥118.10, Eoptolink Technology increased 0.6% to ¥398.50, and Zhongji Innolight gained 2.7% to ¥926.04.