China factory activity contracts for second straight month in Aug

China's manufacturing activity contracted for the second consecutive month in August, according to official data released on Monday. The official manufacturing purchasing managers' index (PMI) rose slightly to 49.8 from 49.2 in July, surpassing analysts' estimates of 49.5. However, the services sector also shrank, signaling a fragile recovery in the world's second-largest economy.

The non-manufacturing PMI remained unchanged at 49.0, indicating a second straight month of contraction. The broader economy continues to face challenges, with China's industrial output, retail sales, and investment all slowing down in July. Weak domestic demand and a prolonged property downturn are putting pressure on activity.

Despite Beijing's efforts to bolster the economy through policy support, including an 800 billion yuan financing tool for local projects, implementation is anticipated to be a lengthy process.