“July, China property sales decline accelerated. Top 50 developers reporting 1/4 to 1/2 sales plunge. The speed of deterioration is staggering.”
Hao Hong also remarked on the Politburo’s silence on the property market, stating:
“For the first time ever, the statement from the Politburo Meeting did NOT mention ‘property’—at all.”
Electric vehicle (EV) and tech stocks also posted heavy losses. Tech heavyweights Baidu (9888) and JD.com (9618) dropped 3.5% and 5.98%, respectively. In the EV sector, BYD (1211) and Li Auto (2015) slumped 10.34% and 14.03%, respectively.
Manufacturing PMI data revealed a weakening demand environment, weighing on auto stocks as US tariffs remain in effect.
China Manufacturing PMIs Flash Red
China’s NBS Manufacturing PMI fell from 49.7 in June to 49.3 in July. Notably, the new order index declined from 50.2 to 49.8, while the new export order index fell 1.2 percentage points to 47.1
Meanwhile, the more influential S&P Global China General Manufacturing Index declined to 49.5 in July, down from June’s 50.4. Crucially, the PMI dropped below the neutral 50 level. New order growth softened in July, while new export orders contracted for the fourth month as US tariffs weighed on external demand. The July survey also revealed lower employment and intensifying price pressures.
July’s data signaled a potentially sharp fall in exports and slower economic growth. China’s economy expanded by 5.2% year-on-year in Q2, marginally softer than Q1’s 5.4% growth. Exports rose 5.8% year-on-year in June, up from 4.8% in May, bolstering the economy.
Natixis Asia Pacific Chief Economist Alicia Garcia Herrero recently warned of a potential slump in external demand for Chinese goods, stating:
“Export growth might slow to 2-3% year-on-year in the third quarter of this year, and perhaps just 1% in the last quarter. Shipments of low value goods, which can easily be manufactured elsewhere—such as furniture, clothes, shoes, and toys—to be most affected. Bicycles originally intended for export to America are already on sale at low prices on Chinese e-commerce sites.”
Hang Seng Faces Key Test Between 24,000 Support and 25,000 Resistance
Disappointment over the outcome of US-China trade talks and the Politburo Meeting’s silence on stimulus sent the Hang Seng Index to a weekly low of 24,508. The Index had briefly climbed to a high of 25,667 on hopes that the third round of trade talks would yield a deal.
Despite the week’s sell-off, the Index held above the crucial 24,500 support level and the 50-day Exponential Moving Average (EMA), indicating a bullish bias.
Progress toward a US-China trade deal and meaningful stimulus measures from Beijing could lift sentiment. A breakout above 25,000 could enable the bulls to target the July 24 high of 25,736 and potentially 26,000. Conversely, rising US-China trade tensions and a lack of stimulus could send the Index toward the 50-day EMA. Increased selling pressure may bring the 24,000 level into sight.