China's manufacturing activity seen extending decline in July

The world's second-largest economy grew much slower than expected in the second quarter, with the consumer sector a particular cause for concern. Retail sales growth sank to an 18-month low as deflationary pressures forced businesses to slash prices on everything from cars to food to clothes.

While half of the 300 billion yuan ($41.40 billion) in ultra-long treasury bonds China's state planner announced on Thursday will be allocated to support a program of consumer trade-ins, that amount is seen as too little to meaningfully boost economic recovery, as it is equivalent to just 0.12% of economic output and 0.3% of 2023's retail sales.

Solid Chinese exports have provided some support to factory managers in recent months and propped up progress towards the government's growth target of around 5%, but as a growing number of trade partners mull import tariffs, the jury is out on whether that boost can be sustained.

Outbound shipments grew at their fastest pace in 15 months in June, while imports unexpectedly shrank, suggesting domestic demand remained weak and manufacturers were frontloading orders to get ahead of tariffs from trade partners.

Depressed domestic consumption is closely related to falling property valuations that have left families feeling poorer as 70% of household wealth is in real estate.

New home prices fell at their fastest pace in nine years in June.

Analysts expect the government to implement another round of property-supporting policy measures after a meeting of the Politburo, a top decision-making body of the ruling Communist Party, expected to take place this week.

The official PMI will be released on Wednesday. The private sector Caixin factory survey will be released on Aug. 1. Analysts expect its reading