China's factory activity slumped in July, official data showed on July 31, as leaders in the world's second-largest economy struggle to reignite domestic demand.
The manufacturing purchasing managers' index (PMI), a closely watched gauge of industrial health, fell into contraction territory at 49.2, data by the National Bureau of Statistics showed.
That was well below the 50.1 expansion forecast by Bloomberg based on a survey of economists, and also down from June's 50.3.
China's manufacturing sector has faced uncertainty this year due to the Middle East war, which has driven up global energy prices.
Booming exports underpinned by strong demand overseas for electronics and AI hardware have provided a lifeline as domestic consumption remains weak.
In a stark sign of woes, the official non-manufacturing PMI, which measures activity in sectors such as services and construction, fell sharply to 49in July, the data showed on July 31.
That contraction was the most pronounced in more than three years.
The reading indicated "a decline in the non-manufacturing sector's prosperity level" in July, said NBS statistician Huo Lihui in a statement.
The lacklustre figures come one day after President Xi Jinping acknowledged "difficulties and challenges" facing the country's economy.
Xi said in a speech addressing leaders that in the second half of the year "we must enhance the effectiveness of macroeconomic policies (while) focusing on tapping the potential of domestic demand", according to state news agency Xinhua.
