China's sluggish internal domestic demand appears to be a more pressing issue than external tariff hikes by the US and the European Union. The divergence between China's official PMI, reflecting larger companies, and the S&P Global PMI, representing export-oriented small and medium private businesses, highlights the slowdown in domestic consumer demand despite strong export growth.
Economists express concerns about China's ability to rely solely on exports for economic recovery as the market's faith in the country's rebound diminishes. While exports may provide temporary support, the weaknesses in domestic demand could overshadow the external growth. China's ongoing economic transition poses additional challenges to its economy.
China's PMI readings reveal the struggle the country is facing due to weak consumer confidence and a property crisis, affecting manufacturing activity. Despite efforts to navigate through the economic transition, China continues to battle with an uneven economic landscape.
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