Global Manufacturing Slumps as China's Economic Slowdown Hits Hard

Global factory activity contracted in July, with the euro zone, Japan, South Korea, and other Asian countries experiencing a decline in manufacturing activity. The downturn is attributed to slowing growth and weakness in China, which is impacting the world economy. The euro zone saw the fastest contraction in manufacturing activity since the onset of COVID-19, with notable weakness in Germany, France, and Italy. China's private PMI fell for the first time since April, while Japan, South Korea, Taiwan, and Vietnam also experienced a contraction. The challenges faced by policymakers include balancing aggressive tightening cycles to control inflation while preventing potential recessions.