China’s economy is being rattled by the Delta variant and supply chain woes

An official survey of manufacturing activity fell to 50.1 in August from 50.4 in July. That was just above the 50-point mark indicating expansion rather than contraction, but still the slowest rate of growth since The country’s worst coronavirus outbreak in a year spurred authorities to take dramatic measures to stop new infections, including locking down cities, canceling flights and suspending trade. The aggressive and uncompromising “There continues to be signs of supply shortages in the survey breakdown, with delivery times lengthening further while firms continued to draw down their inventories of raw materials,” Evans-Pritchard wrote. Covid outbreaks and shipping woes aren’t all that China is dealing with, though. Beijing has also embarked on a massive crackdown targeting businesses. Tech, private education and other industries have all been swept up in the fracas.The clampdowns — especially in tech and education — “are impacting both employment concerns in those affected and broader consumer confidence as fears of wider interventions rise,” wrote Jeffrey Halley, senior market analyst for Asia Pacific at Oanda, on Monday.Evans-Pritchard expected most of the weakness reported Tuesday to reverse in September, since Covid cases are under control in China. But he said other concerns persist, pointing to tight credit conditions as posing a “growing drag.””The upshot is that, even looking through the volatility caused by China’s recent virus flare-up, the economy looks to be coming back to earth,” he added.