PEKING (Reuters) – Factory activity in China contracted for the fourth month in a row in August as US trade pressure increased and domestic demand remained weak, indicating a further slowdown in the world's second largest economy.  The ongoing weakness in China's vast manufacturing sector could fuel the expectation that Beijing will have to provide faster and more aggressive impetus to survive the biggest downturn in decades.
PMI fell to 49.5 in August According to China's National Bureau of Statistics, Saturday's PMI was below the 50-point mark, which separates monthly growth from contraction, from 49.7 in July.
According to a Reuters survey, August PMI figures are likely to remain unchanged from the previous month
The official factory display showed that trade breaks with the United States increased and the slowdown in global demand continued to affect China's exporters.
Export orders fell for the 1
Total domestic and foreign orders also declined further suggesting that domestic demand remains weak Numerous growth-enhancing measures over the past year.
Manufacturers in consumer-related industries such as the automotive sector were particularly vulnerable. Automakers such as Geely <0175.HK> and Great Wall <601633.SS> have lowered their sales and profits expectations.
The data showed that the activities of SMEs and small businesses were affected, even if large manufacturers, many of whom were supported by the government, managed to expand in August.
The factories continued to cut jobs in August, given the uncertain business outlook. The employment sub-index fell to 46.9, compared with 47.1 in July.
August witnessed dramatic escalations in the bitter, year-long Sino-US trade crisis when President Donald Trump announced earlier this month that he would do so by levying new tariffs on Chinese goods from 1 September and China will weaken its yuan currency days later.
After Beijing retaliated with retaliatory tariffs, Trump said the existing charges would also be raised in the coming months. The combined steps now effectively cover all of China's exports to the United States.
Both sides said this week that they will discuss another round of personal negotiations next month. There is still room for de-escalation in hope.
Trump said on Monday that China wanted to "very badly" reach a deal and cited what he called increasing economic pressure on Beijing and job losses.
But most analysts doubt that the dispute will soon end, and some have recently cut Chinese growth forecasts in the coming quarters.
The growth of the Chinese service sector has revived for the first time in five months in August, official figures of a separate enterprise survey, which has risen from 53.7 in August to 53.8.
Beijing has relied on a strong service sector to cushion part of the economic impact of trade uncertainty and sluggish production activity.  02] Despite the overall higher number of activity in the real estate industry shrank, said the statistics office in a statement.
The service sector has been supported in recent years by rising wages and robust purchasing power of Chinese consumers. However, the sector eased late last year amid a more general slowdown.
(Report by Roxanne Liu and Dominique Patton, editorial by Clarence Fernandez)