For August, the government's and Caixin's gauge for manufacturing and services were all above the 50-level, raising hopes that the economy had bottomed. But that's not the case, economists cautioned.
"[Recent] data belies the fact that the business climate is weak. Private sector investment growth is in very low single digits," explained Jeremy Stevens, Standard Bank economist, in a Friday note, adding that companies are choosing to sit on cash instead of increasing capital expenditure.
While the world's number two economy is widely expected to hit its growth target of 6.5 percent this year, Stevens said the chances of any major fiscal or monetary impulse was low.
"Overall, the economy continued to expand in August at a pace similar to the growth rate for July, but conditions in manufacturing and service sectors diverged again. Downward pressure on China's economy remains and supportive policies must continue," said Zhengsheng Zhong, director of macroeconomic analysis at research firm CEBM Group.
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