[Vehicle Inventory Alert Index for July 2026 Reaches 61.1%] The latest “Vehicle Inventory Alert Index Survey” released by the China Automobile Dealers Association shows that the Vehicle Inventory Alert Index (VIA) for automobile dealers in July 2026 was 61.1%, up 3.9 percentage points YoY and up 3.9 percentage points MoM. The VIA, issued by the China Automobile Dealers Association, reflects the inventory level, market demand and operational risk of automobile dealers across the country. The index uses the 50% mark as the threshold. The July reading remained above the 50 mark, indicating that inventory pressure on automobile dealers exceeded the industry alert level.

To align with the national strategy for high-quality development of the automotive industry and the policy requirements of initiatives such as Guangdong Province's auto parts industry "Strong Chain Project," with the aim of deepening local matching within the automotive industry chain and promoting the coordinated and integrated development of the Guangdong automotive industry, the Guangdong Automotive Industry Association and GAC Parts Co., Ltd. will jointly host the "2026 Automotive Supply Chain into GAC" event. We sincerely invite relevant units to exhibit and participate. The specific details are as follows: I. Basic Information of the Event Theme: New Quality Empowerment, Smart Drive for the Future Time: August 26, 2026 Venue: GAC Trumpchi Address: No. 633, East Jinshan Avenue, Panyu District, Guangzhou II. Organizational Structure of the Event Guiding Unit: Guangzhou Automobile Group Co., Ltd. Organizers: Guangdong Automotive Industry Association, GAC Parts Co., Ltd. Co-organizers: GAC Group Procurement Headquarters, GAC Group Large R&D (Product Management) System, Guangdong Electronic Information Industry Association, Guangdong Connector Association, Shenzhen Automotive Electronics Industry Association, Guangzhou Automotive Industry Association, Guangzhou Intelligent Connected and NEV Industry Talent Federation, Infocom Conference Exhibition (Shanghai) Co., Ltd., Shanghai Zishen Business Consulting Co., Ltd. III. Main Agenda of the Event (I) Morning Arrangements (Held Concurrently Throughout the Day): 9:00-17:00: Product display and exchange; 9:00-17:00: One-on-one matching negotiations between exhibiting enterprises and GAC Group procurement, R&D, GAC Parts and its subordinate enterprises, and specially invited Tier 1 suppliers (10 companies). (II) Afternoon Arrangements: 13:30-14:00: Check-in for participants 14:00-14:30: Leadership exhibition tour 14:30-14:35: Remarks by government department leaders 14:35-14:40: Remarks by GAC Group leaders 14:40-15:00: Release of requirements by GAC Group's Large R&D System and Procurement Headquarters 15:00-15:10: Release of supplier requirements by GAC Parts (including direction, technology, quality, cost, and delivery requirements) 15:10-16:40: Roadshow by enterprises in the fields of new materials, lightweighting, intelligent connectivity, smart cockpits, and suspension systems 16:00-17:00: Free exchange and matching / factory tour IV. Requirements for Exhibiting Enterprises Fields: Tier 1, Tier 2, and Tier 3 supporting suppliers in the fields of new materials, lightweighting, intelligent connectivity, smart cockpits, and suspension systems. System Requirements: Primarily enterprises outside the GAC system. Qualification Conditions: Annual revenue exceeding 10 million yuan, holding ISO14000 and IATF16949 certifications, and possessing stable supply capabilities. Note: After registration, exhibiting enterprises must be approved by GAC Group and GAC Parts before participating in this product display. V. Fee Standards For more information or if you are interested in exhibiting, please contact: Lou Kexin 190 6801 9380 (The information in this document is sourced from the Guangdong Automotive Industry Association)

KG Mobility (KGM) signed a USD 75 million strategic investment agreement with Chery Automobile on August 2. The agreement marks the third stage of cooperation between the two companies, following a platform licensing agreement in 2024 and a joint development agreement for mid- to large-sized SUVs in 2025. The first outcome, Project SE10, will be a midsize SUV carrying on the heritage of the Rexton. The model will be offered in plug-in hybrid and 2.0-liter gasoline versions and is scheduled for launch in early 2027.

Recently, CAAM released the automobile production and sales data for June 2026. In H1, China's automotive industry continued its transformation and upgrading trend, with the traditional internal combustion engine vehicle market further stabilizing and NEV maintaining growth. From January to June, NEV production and sales reached 7.438 million and 7.446 million units, respectively, both showing YoY growth, with pure electric vehicle sales accounting for 67%. Against the backdrop of an overall positive NEV market, hydrogen fuel cell vehicles performed relatively weakly. In H1, China's hydrogen fuel cell vehicle production and sales were approximately 500 and 700 units, respectively, down 59.9% and 50.1% YoY. In June alone, production and sales were about 100 and 50 units, with YoY declines of 46.8% and 78.9%, indicating that market promotion remains under significant pressure. There is a mismatch between early-stage investment and long-term returns. Currently, hydrogen transportation has formed an industry chain covering hydrogen production, storage and transportation, refueling, and end-use applications, but various constraints still exist at each stage. At the hydrogen production end, the construction of hydrogen refueling station infrastructure usually requires high investment, with a long payback period. Affected by insufficient hydrogen supply sources and network density, some stations have low operational efficiency. The storage and transportation segment has yet to form a mature and unified refueling system, and coupled with generally high costs of hydrogen production, storage, transportation, and refueling, the economic viability of end-use applications still needs further verification. Industry insiders believe that the slowdown in fuel cell vehicle development is the result of multiple factors, including technology, costs, supporting facilities, and market demand. High hydrogen production and refueling costs make fuel cell vehicles less economical to purchase and operate than internal combustion engine vehicles and pure electric vehicles. High land costs in some large cities also increase the difficulty of site selection and construction for hydrogen refueling stations. Meanwhile, the limited number of supporting facilities and insufficient station profitability further constrain vehicle promotion. The industry has not yet achieved economies of scale. Profit pressure also reflects the development challenges of the hydrogen fuel cell industry. Take the domestic hydrogen fuel cell industry leader Yihuatong as an example: the company's net loss attributable to shareholders of the parent company in 2025 was 671 million yuan, with the loss further widening compared to 2024. The enterprise stated that the prolonged losses were mainly affected by factors such as the early-stage commercialization characteristics of the hydrogen fuel cell industry and changes in the business environment. The industry is still in the initial stage of development, without yet forming large-scale market effects. Market orders are relatively small, competition is intense, and product prices remain under pressure. At the same time, high-tech industries require long-term R&D investment, and the conversion of technological achievements into commercial returns also takes a certain period. It is widely believed within the industry that breaking the bottleneck in the large-scale development of hydrogen fuel cell vehicles requires joint efforts from all parties in the industry chain. Enterprises should maintain a dynamic balance between operation and R&D, continuously optimize cost structures, and seek breakthroughs in technology expansion and application scenario innovation. At the same time, the industry must follow the laws of development and avoid an imbalance between long-termism and short-term market enthusiasm.

[Geely Auto July sales hit a record high for the same period, new energy export sales up 616% YoY] Geely Automobile Group announced July sales of 250,161 units, another record high for the same period; export sales outside China of 107,000 units, a new all-time monthly high; July new energy sales of 160,165 units, up 23% YoY; new energy export sales of 62,604 units, up 616% YoY.

SMM August 1 News: In the metals market: On the overnight session last Friday, base metals on the domestic market showed mixed performance. SHFE copper fell 0.18%, with a monthly gain of 2.9% in July. SHFE aluminum was flat at 23,665 yuan/mt, with a monthly gain of 4.63% in July. SHFE lead fell 1.41%, SHFE zinc edged up 0.64%, and SHFE tin rose 0.72%. SHFE nickel fell 0.24%. In addition, the most-traded alumina futures edged up 0.04%, while the most-traded foundry aluminum contract edged up 0.02%. On the overnight session last Friday, ferrous metals mostly fell. Stainless steel rose 0.17%, iron ore fell 2.85%, rebar fell 0.83%, and HRC fell 0.74%. In the coking coal and coke sector, the most-traded coking coal contract fell 1.38%, and the most-traded coke contract fell 1.51%. On the overseas market during the overnight session last Friday, LME base metals generally rose. LME copper edged up 0.03%, with a monthly gain of 3.16% in July. LME aluminum rose 0.06%, with a monthly gain of 2.9% in July. LME lead fell 0.69%. LME zinc rose 0.84%. LME tin rose 0.26%. LME nickel fell 0.35%. In the precious metals market during the overnight session last Friday: COMEX gold fell 1.49%, with its weekly chart posting a second consecutive gain, up 0.68% for the week, and its July monthly chart rising 1.49%. COMEX silver fell 2.1%, with its weekly chart declining 1.92% for the week, and its monthly chart posting a second consecutive loss, down 3.58% in July. In the overnight session last Friday, the most-traded SHFE gold contract rose 0.89%, with its weekly chart posting a second consecutive gain, up 0.55% for the week, and its July monthly chart rising 1.52%. The most-traded SHFE silver contract fell 1.01%, ending a two-week winning streak but still up 0.98% for the week, and its July monthly chart rising 1.21%. As of 8:16 AM on August 1, closing prices from the overnight session last Friday: Macro Front China: [State Council Executive Meeting: Studying and Implementing General Secretary Xi Jinping’s Key Speech on the H1 Economic Situation and Efforts for H2 Economic Work] The meeting stressed the need to align thinking and understanding with the CPC Central Committee’s scientific assessment of the economic situation, take more concrete measures to consistently steer the economy toward new, superior, and sounder development, and strive for a good start to the 15th Five-Year Plan period. It called for effectively enhancing the implementation efficiency of macro policies, making full and good use of all existing policies, and promptly devising and rolling out pragmatic and effective incremental policies. It also emphasized the need to effectively expand domestic demand, launch a set of robust measures in sectors with great potential and strong driving force, accelerate the execution of major projects designated in the 15th Five-Year Plan, and solidly advance the planning and construction of the “Six-Network” infrastructure. Efforts must be continuously made to strengthen internal drivers of development, and more concrete and effective measures should be introduced in building a unified national market and improving the business environment. We must persistently guard against and defuse risks in key areas, do a solid job in disaster prevention, mitigation, and relief, as well as work safety, strengthen support for people in difficulty, and secure the bottom line of people’s livelihood. (CCTV) [Ministry of Industry and Information Technology Visits Selected Automobile Producers for Supervision and Inspection] To further regulate competition order in the automotive industry and enhance production conformity and quality and safety levels of automotive products, the Equipment Industry Department I of the Ministry of Industry and Information Technology conducted supervision and inspection on vehicle product safety assurance capabilities and production conformity at Chery Automobile Co., Ltd., NIO Technology (Anhui) Co., Ltd., and Anhui Jianghuai Automobile Group Corp., Ltd. from the 30th to the 31st. It is learned that going forward, the Ministry of Industry and Information Technology will, together with relevant departments, further carry out actions to improve production conformity and quality of road motor vehicle products, strengthen entry review and testing verification management for “aggressive” innovative designs of automotive products, urge automobile and motorcycle producers to thoroughly identify product safety risks and hazards, strengthen product testing, verification, and safety assessment, standardize marketing and promotional practices, uphold product safety bottom lines, and effectively protect consumers’ lawful rights and interests. (Xinhua News Agency) [CSRC Approves Registration of Coke Options] Recently, the CSRC approved the registration of coke options on the Dalian Commodity Exchange. The CSRC will urge the Dalian Commodity Exchange to make all preparations to ensure the smooth launch and stable operation of coke options. On the US dollar: Last Friday, the overnight US dollar index fell 0.2% to 99.78. On the weekly chart, the dollar index declined by 1.65% for the week. On the monthly chart, the dollar index declined by 1.37% for the month. According to a New York Times report, Fed Chairman Warsh is reportedly considering reducing the number of regularly scheduled interest-rate-setting meetings of the Federal Reserve, a move that could cause huge shockwaves and would mark the most significant change in how the Fed operates in recent years. Currently, the Fed’s 12-member Federal Open Market Committee (FOMC) meets eight times a year to vote on whether to raise, lower, or maintain borrowing costs. According to four people familiar with the matter, Warsh proposed adjustments to the meeting frequency at this week’s Fed meeting. According to the people, at this week’s meeting, Warsh discussed the legal basis the Fed must follow regarding the minimum number of meetings it is required to hold each year and a timetable for such adjustments. According to sources, Walsh asked officials to provide him with their individual views, rather than holding a full discussion on the meeting agenda during this week’s session. (Jin10 Data APP) Fed Chairman Walsh kept interest rates unchanged this week, but three officials dissented, arguing for an immediate rate hike to address persistent inflation risks. Katharine Neiss, Deputy Head of Global Economics at PGIM Credit, said Walsh’s press conference performance was "weaker than expectations," and she expects the US Fed’s "hawkish pivot" to materialize in September, when three consecutive rate hikes could be delivered. Elias Haddad of Brown Brothers Harriman noted: The support for the US dollar from the resilience in US economic activity was offset by Walsh’s failure to translate his hawkish inflation rhetoric into credible policy action, raising the risk of the Fed falling behind the curve. According to the CME FedWatch Tool, markets are currently pricing in a 65% probability of a September rate hike, a pullback from 82% a week ago. (Wall Street Insight) Three Fed policymakers said their dissenting votes in favor of a rate hike this week stemmed from stubborn inflationary pressures, signaling rising internal pressure on Fed Chairman Walsh to act. In statements released Friday morning, Hammack and Kashkari said they are concerned that, while the current round of price increases may have originated from short-term factors such as President Trump’s tariff policies and the Iran war, the inflation picture now warrants action by the US Fed. Logan joined them, stating that even if inflation has cooled somewhat, it is unlikely to fully pull back to the Fed’s 2% target without a rate increase; without any policy restraint, inflation could continue to exceed the target until an unexpected shock hits. Kashkari said that if inflation remains stubborn, he could support a series of rate hikes—not just a single move—to prevent it from becoming further entrenched. "A series of smaller policy adjustments may be preferable to waiting for developments and ultimately having to take more forceful action," he said. Hammack said the pace of price increases could continue to accelerate if the Fed does not tighten policy. "Inflation has been stubbornly above 2% for more than five years, and I am not confident it will fall back to our target on its own," she said. (Jin10 Data APP) Fed’s Barkin said it is an "open question" whether the US Fed has set interest rates at a level sufficiently restrictive to curb inflation, adding that he is unsure whether he would have voted in favor, like the three other regional Fed presidents who dissented in favor of a hike this week. In an interview on Friday, Barkin said: 'I think there is a strong case for tightening policy and taking back some of last year's rate cuts.' He noted that given the slowdown in June inflation data, 'I think one could also argue... there is time before the next meeting to judge whether the current policy stance is appropriate.' Barkin will not vote on interest rate decisions until next year. Additionally, Barkin was sceptical that the labour market has significantly strengthened. He said, 'It doesn't feel like the labour market is very tight.' He also pointed out that price increases are not transmitting evenly through the economy, making it difficult to gauge how much inflation remains. (Jin10 Data APP) On the macro front: This week will see the release of data including China July RatingDog Manufacturing PMI, Switzerland July CPI MoM, France July Manufacturing PMI Final, Germany July Manufacturing PMI Final, Eurozone July Manufacturing PMI Final, UK July Manufacturing PMI Final, US July S&P Global Manufacturing PMI Final, US July ISM Manufacturing PMI, US June Construction Spending MoM, US June Trade Balance, US June JOLTS Job Openings, US June Factory Orders MoM, China July RatingDog Services PMI, France June Industrial Production MoM, France July Services PMI Final, Germany July Services PMI Final, Eurozone July Services PMI Final, UK July Services PMI Final, Eurozone June PPI MoM, US July ADP Employment Change, US July S&P Global Services PMI Final, US July ISM Non-Manufacturing PMI, Switzerland July Seasonally Adjusted Unemployment Rate, Eurozone June Retail Sales MoM, US July Challenger Job Cuts, US Initial Jobless Claims for the week ending August 1, US July Global Supply Chain Pressure Index, US June Wholesale Sales MoM, France Q2 ILO Unemployment Rate, Germany June Seasonally Adjusted Industrial Production MoM, Germany June Seasonally Adjusted Trade Balance, UK July Halifax Seasonally Adjusted House Price Index MoM, France June Trade Balance, Switzerland July Consumer Confidence Index, Canada July Employment Change, US July Unemployment Rate, US July Seasonally Adjusted Nonfarm Payrolls, US July Average Hourly Earnings YoY, US July Average Hourly Earnings MoM, US July NY Fed 1-Year Inflation Expectations, China July Trade Balance in USD terms, China July Foreign Exchange Reserves, China July Trade Balance, China July CPI YoY, and China July PPI YoY. In addition, attention this week should also be paid to: SpaceX will report its Q2 2026 results; 2028 FOMC voter, St. Louis Fed President Musalem will speak on the US economy and monetary policy; 2027 FOMC voter, Richmond Fed President Barkin will deliver a speech. Crude Oil: Both oil futures surged in the overnight session last Friday, with WTI up 3.84% and Brent up 4.79%. For the week, WTI futures fell 2.81%, while Brent futures slipped 0.7%. For the month, WTI futures soared 24.89% and Brent futures jumped 24.8%. A decline in ship transits through the Strait of Hormuz heightened market concerns over global crude oil shipments. Uncertainty persists over when Middle Eastern crude oil supply will return to normal. The US-Iran ceasefire agreement reached in June had completely broken down by early July. From mid to late July, the Strait of Hormuz, the world’s most critical energy trade choke point, remained severely disrupted, with intermittent blockades at times. Meanwhile, Ukraine’s long-range drone strikes on Russian refineries destroyed around 30% to 45% of Russia’s operational refining capacity, pushing European diesel refining margins above $60/bbl and driving global refined product prices near wartime highs. (Wall Street CN) Data released by the international shipping information platform “MarineTraffic” on July 31 showed that the number of ships transiting the Strait of Hormuz on the 30th fell to 5 from 22 the previous day, a decline of 77%. The platform’s data indicated that all 5 ships passed through the Strait of Hormuz via the lane on the Iranian side. (Jin10 Data App) According to CBS News, citing multiple sources, the US and Israel are planning to carry out “one of the most intense bombing campaigns to date” against Iran’s energy infrastructure, potentially targeting power plants and refineries, with the operation possibly lasting through the weekend. Iranian media reported on August 1, citing an Iranian official, that Iran considers a US-Israeli attack on its infrastructure to be a “reckless act” and has developed a comprehensive plan to respond to “any possible reckless actions by the US.” (Jin10 Data App) According to Iran’s Tasnim News Agency, the Yemeni Houthi group said that in implementing a “blockade for blockade” strategy, after imposing maritime restrictions on Saudi oil tankers, it had forced 8 Saudi tankers to change course and reroute around the Cape of Good Hope. (Jin10 Data App) Additionally, data from the Intercontinental Exchange (ICE) showed that for the week ended July 28, speculative net long positions in Brent crude fell by 6,948 contracts to 185,083 contracts. Speculative net long positions in diesel rose by 2,654 contracts to 87,194 contracts. (Jin10 Data App) Recommended Reads:

CSB stated on an interactive platform that its main business covers the R&D, production, and sales of self-lubricating bearings and high-performance polymers, with products spanning automobiles, construction machinery, clean energy, embodied AI, and other fields. As a Tier 2 or Tier 3 supplier to automotive OEMs, the company has already supplied products used in Tesla vehicles; in the field of embodied AI parts, the company has engaged in business and technical cooperation with multiple enterprises in China's embodied AI industry chain.

According to SMM survey, during July 24-30, 2026, the weekly comprehensive operating rate of lead-acid battery enterprises across five provinces was 60.31%, down 2.24 percentage points WoW. The operating rate of lead-acid battery enterprises continued to decline this week. Affected by high-temperature holidays and month-end inventory-related production cuts, the decline in the operating rate widened further compared to last week. Approaching August, although the traditional peak consumption season is about to begin, consumption in the end-use markets for e-bike and automobile batteries showed no improvement. Lead-acid battery enterprises remained cautious in production, with most maintaining a strategy of producing based on sales. In addition, while the high-temperature holidays for some enterprises are about to end next week, others plan to start their holidays in early August. As a result, the room for a rebound in the operating rate of lead-acid battery enterprises next week is expected to be limited.

In 2026, the global lead-acid battery industry maintains steady growth, holding irreplaceable advantages in starting, industrial, and energy storage applications. Secondary lead has become the core raw material supply, and green recycling and compliant manufacturing have become the industry baseline. The global industry chain is accelerating its shift to Southeast Asia, where Vietnam, leveraging its motorcycle and automobile ownership, manufacturing supporting facilities, and trade facilitation advantages, has become a strategic hub for lead smelting, battery production, and recycling. Meanwhile, the lead industry chain faces multiple challenges such as raw material supply-demand balance, international trade compliance, upgrading environmental standards, iteration of advanced lead battery technologies, supply chain security, and cost control. To build a global lead industry exchange and cooperation platform and promote collaborative innovation across the entire chain of lead ore, primary lead, secondary lead, lead-acid batteries, equipment, and auxiliary materials, the 2026 SMM Global Lead-Acid Battery Supply Chain Innovation Conference is set to take place in Ho Chi Minh City. SMM, in partnership with Hunan Ruiyi Resources and Environment Technology Co., Ltd. , invites you to join the conference. The event will focus on industrial policies, market trends, technological upgrades, circular economy, and the joint development of the global supply chain, helping enterprises seize opportunities and achieve win-win collaboration. Click to register now for the conference, and join us in witnessing and participating in this extraordinary and far-reaching industry event, creating a brilliant new chapter together! Hunan Ruiyi Resources and Environment Technology Co., Ltd. is an "industry-academia-research-application" cooperation partner of Central South University. Relying on the Institute of Resource Recycling and Environmental Engineering of Central South University, the company primarily engages in technology development and transformation, technical consulting services, process and plant design, equipment manufacturing, and engineering contracting in fields such as clean and efficient utilization of secondary non-ferrous metal resources, comprehensive recovery and safe disposal of heavy metal and arsenic-containing hazardous waste, and extraction. The company focuses on technology R&D and promotion in the hazardous waste disposal industry. With side-blown furnaces, pure oxygen converters, low-temperature pyrolysis furnaces, electric furnaces, and fuming furnaces as core equipment, it enhances metal recovery rates, saves energy, and reduces emissions in the secondary lead recycling industry, the comprehensive recovery and safe disposal of copper scrap, the vitrification of fly ash and residues from municipal solid waste and hazardous waste incineration, and the comprehensive recovery and safe disposal of heavy metal and arsenic-containing hazardous waste, thereby meeting the growing needs of clients; the company has an R&D and design engineering team centered on professors and senior engineers, bringing together talented professionals from metallurgical production and management, environmental protection, plant design, mechanical manufacturing, automation, electrical engineering, and other fields. It possesses full-chain service capabilities from technical consulting to furnace operation in the areas of secondary lead, copper scrap recycling, secondary zinc, and arsenic-containing hazardous waste disposal. In the R&D and manufacturing of side-blown furnaces and the aforementioned resource recycling fields, it holds over 90 invention patents and utility model patents. RE Technology Co., Ltd. (referred to as RE TECH) is a cooperative high-techcompany (industry-institute-research) affiliated with Central South University, whose metallurgy department is one of the most prestigious in the world. With independent patented oxygen-enriched side-blowing furnace as the core equipment which have widely applied in lead recvcling industry and have won a lot of awards because of its innovative technology, we also have the ability to design the entire plant, and design and fabricate the essential equipment including side-blowing furnace, rotary furnace, blast furnace, convert, electrical furnace, fuming furnace and other equipment. In our role as the leading engineering company in lead recycling, we continue to invest in upgrading equipment and processes to meet the ever-increasing requirement of the industry, including improving metal recovery rates, reducing emissions, and treating materials more efficiently. We are expanding our field from lead to copper, nickel,zinc, tin, antimoney etc. to ensure that nonferrous secondary resources are reused efficiently and cleanly, heavy metals and arsenic-containing hazardouswastes are reecovered and disposed safely. Professors, experts and engineers make up the RE TECH team, whose majors include metallurgy, environmental protection, mechanical, automation, electrical and otherdisciplines. With more than 90 patents, the team is capable of providing consulting, engineering, equipment fabrication, installation, commissioning, and operation services to our respected clients. Contact Tel: 0731-82850226 Email: info@rezh.net Website: http//www.hnrezh.com Address: No. 19 Ziyuan Road, Yuelu District, Changsha, Hunan Province Long press and scan to register now 2026 SMM Global Lead-Acid Battery Supply Chain Industry Conference

According to the National Bureau of Statistics (NBS), the manufacturing PMI stood at 49.2% in July, down 1.1 percentage points MoM, with the overall sentiment pulling back somewhat. The non-manufacturing business activity index for July was 49.0%, down 1.2 percentage points MoM, indicating a lower level of non-manufacturing activity compared to the previous month. The composite PMI output index for July was 49.3%, down 1.3 percentage points MoM, signalling that the overall pace of business activity among China's enterprises slowed down MoM. Huo Lihui, chief statistician at the NBS Service Industry Survey Centre, noted that the manufacturing PMI pulled back in July while high-tech manufacturing continued to expand. The manufacturing PMI fell to 49.2%, affected by factors including a relatively high base from the previous period of rapid growth in manufacturing and the traditional production off-season in some manufacturing sectors. The equipment manufacturing and high-tech manufacturing sectors continued to play a supportive and leading role, with their respective PMIs at 51.4% and 53.3%, significantly higher than the overall manufacturing figure and maintaining relatively rapid expansion, steering manufacturing development towards higher quality and innovation. The PMIs for the consumer goods industry and the high-energy-consuming industry were 47.8% and 47.0%, down 2.4 and 0.1 percentage points MoM, reflecting a pullback in sentiment. China PMI Performance in July 2026 I. China Manufacturing PMI Performance In July, the manufacturing PMI stood at 49.2%, down 1.1 percentage points MoM, with sentiment pulling back somewhat. By enterprise size, the PMIs for large, medium, and small enterprises were 49.5%, 49.7%, and 47.4%, respectively, down 1.2, 0.8, and 0.8 percentage points MoM, all below the threshold. Among the five sub-indices that make up the manufacturing PMI, the production index, new orders index, raw material inventory index, employment index, and supplier delivery time index were all below the threshold. The production index was 49.9%, down 1.5 percentage points MoM, indicating that manufacturing production activity experienced some slowdown. The new orders index was 48.5%, down 2.7 percentage points MoM, pointing to a pullback in manufacturing market demand. The raw material inventory index was 48.3%, down 0.1 percentage points MoM, suggesting that inventories of major raw materials in the manufacturing sector continued to decline. The employment index was 49.0%, up 0.5 percentage points MoM, indicating that the labour market sentiment in manufacturing enterprises rebounded somewhat. The supplier delivery time index was 49.5%, down 0.4 percentage points MoM, signalling that delivery times for raw material suppliers in manufacturing lengthened compared to the previous month. II. China Non-Manufacturing PMI Performance In July, the non-manufacturing business activity index was 49.0%, down 1.2 percentage points MoM, with non-manufacturing sentiment lower than in the previous month. By sector, the construction business activity index was 47.0%, down 2.0 percentage points MoM, and the services business activity index was 49.3%, down 1.1 percentage points MoM. Within the services sector, business activity indices for postal services, telecommunications, broadcasting and satellite transmission services, and culture, sports and entertainment were all in the relatively high sentiment territory above 55.0%. By contrast, business activity indices for capital market services and real estate were below the threshold. The new orders index was 44.4%, down 3.6 percentage points MoM, indicating a pullback in market demand sentiment for non-manufacturing. By sector, the new orders index for construction was 40.1%, down 6.2 percentage points MoM, and the new orders index for services was 45.2%, down 3.2 percentage points MoM. The input price index was 49.7%, unchanged from the previous month but still below the threshold, indicating that the overall level of input prices used by non-manufacturing enterprises for business activities continued to decline. By sector, the input price index for construction was 48.7%, down 1.7 percentage points MoM, and the input price index for services was 49.9%, up 0.3 percentage points MoM. The selling price index was 47.9%, down 0.5 percentage points MoM, suggesting that the overall decline in selling prices for non-manufacturing enterprises widened somewhat. By sector, the selling price index for construction was 47.7%, down 2.1 percentage points MoM, and the selling price index for services was 47.9%, down 0.3 percentage points MoM. The employment index was 45.4%, down 0.4 percentage points MoM, indicating that labour market sentiment in non-manufacturing enterprises pulled back somewhat. By sector, the employment index for construction was 40.9%, down 1.4 percentage points MoM, and the employment index for services was 46.2%, down 0.2 percentage points MoM. The business activity expectations index was 55.4%, up 0.1 percentage points MoM, indicating that non-manufacturing enterprises' confidence in market development strengthened. By sector, the business activity expectations index for construction was 51.8%, up 0.7 percentage points MoM, and the business activity expectations index for services was 56.0%, unchanged from the previous month. III. China Composite PMI Output Index Performance In July, the composite PMI output index was 49.3%, down 1.3 percentage points MoM, indicating that the pace of business activity among China's enterprises slowed down MoM. III. China Composite PMI Output Index Performance In June, the composite PMI output index was 50.6%, up 0.1 percentage points MoM, indicating that the overall expansion of business activity among China's enterprises slightly accelerated. China's PMI Pulled Back in July — Interpretation of China’s PMI for July 2026 by Huo Lihui, Chief Statistician at the NBS Service Industry Survey Centre On 31 July 2026, the NBS Service Industry Survey Centre and the China Federation of Logistics and Purchasing released China's PMI. Huo Lihui, chief statistician at the NBS Service Industry Survey Centre, provided the following interpretation. In July, the manufacturing PMI, non-manufacturing business activity index, and composite PMI output index stood at 49.2%, 49.0%, and 49.3%, respectively, down 1.1, 1.2, and 1.3 percentage points MoM. Sentiment was somewhat lower than in the previous month. I. Manufacturing PMI Pulled Back, While High-Tech Manufacturing Continued to Expand In July, the manufacturing PMI fell to 49.2%, affected by factors such as a relatively high base from the earlier period of rapid manufacturing growth and the traditional production off-season in some manufacturing sectors. (1) The equipment manufacturing and high-tech manufacturing sectors continued to play a supportive and leading role. Their PMIs were 51.4% and 53.3%, respectively, significantly higher than the overall manufacturing figure, maintaining relatively rapid expansion and steering manufacturing development towards higher quality and innovation. The PMIs for the consumer goods industry and the high-energy-consuming industry were 47.8% and 47.0%, down 2.4 and 0.1 percentage points MoM, reflecting a pullback in sentiment. (2) Production and demand in some equipment manufacturing industries grew relatively fast. The manufacturing production index and new orders index were 49.9% and 48.5%, respectively, down 1.5 and 2.7 percentage points MoM, indicating that both manufacturing enterprise production and market demand pulled back. By industry, the production and new orders indices for general equipment and computer, communication and other electronic equipment were both above 53.0%, pointing to high market activity and relatively fast growth in production and demand. In contrast, the production and new orders indices for non-metallic mineral products, ferrous metal smelting and rolling processing, and automobiles were below the threshold, suggesting weak supply-demand sentiment. (3) The price indices declined further. The main raw material purchase price index and the EXW price index were 53.2% and 47.8%, respectively, and have fallen for four consecutive months, influenced by recent fluctuations in some commodity prices. Among these, both price indices for non-ferrous metal smelting and rolling processing were below 45.0%. Due to significant price level fluctuations, enterprises' purchase willingness weakened, and the procurement volume index fell to 49.4% this month. (4) Market expectations remained stable. The manufacturing production and business operation expectations index was 54.1%, reflecting continued overall optimism among enterprises regarding market development. By industry, the expectations indices for food, beverage, and refined tea, as well as railway, shipbuilding, aerospace and other equipment, rose above 60.0%, indicating that relevant enterprises' confidence in near-term industry development strengthened. II. Non-Manufacturing Business Activity Index Declined Somewhat, While the Culture and Tourism Sector Remained Relatively Active In July, the non-manufacturing business activity index was 49.0%, down 1.2 percentage points MoM, with non-manufacturing sentiment lower than in the previous month. (1) Sentiment in the culture and tourism sector rebounded. The services business activity index was 49.3%, down 1.1 percentage points MoM, indicating a pullback in services market activity. By industry, driven by summer consumption, residents' leisure, entertainment, and travel activities increased, with the business activity indices for air transport, accommodation, and culture, sports and entertainment rebounding noticeably MoM, as relevant enterprises' business volumes grew relatively fast. The business activity indices for wholesale and monetary and financial services recorded relatively large declines, representing the main factors behind the fall in overall services sector sentiment this month. Meanwhile, the business activity indices for capital market services and real estate were below the threshold. The services business activity expectations index was 56.0%, unchanged from the previous month, pointing to relatively stable confidence among enterprises regarding near-term market development. (2) Construction sector sentiment headed downwards. Affected by unfavourable factors such as recent high temperatures, heavy rainfall, and flooding in some regions, construction progress slowed down somewhat, and the business activity index was 47.0%, down 2.0 percentage points MoM. The construction business activity expectations index was 51.8%, up 0.7 percentage points MoM, indicating that enterprises' confidence in near-term industry development strengthened somewhat. III. Composite PMI Output Index Below the Threshold In July, the composite PMI output index was 49.3%, down 1.3 percentage points MoM, with the pace of business activity among Chinese enterprises slowing down MoM. The manufacturing production index and the non-manufacturing business activity index, which together form the composite PMI output index, were 49.9% and 49.0%, respectively.