China's factory activity contracted for the third consecutive month in July, with the official manufacturing purchasing managers' index (PMI) recorded at 49.4, indicating ongoing economic difficulties. This decline aligns with a broader trend of weaker-than-expected growth, particularly in the consumer sector, where retail sales have hit an 18-month low due to deflationary pressures. Analysts predict that further stimulus may be necessary to counteract the prolonged property crisis and job insecurity impacting growth. While exports have bolstered manufacturing somewhat, the risk of import tariffs from trade partners raises concerns about sustainability. The government's recent announcement of 300 billion yuan in treasury bonds to support consumer trade-ins is seen as insufficient for significant economic recovery. The overall economic outlook remains clouded as 70% of household wealth is tied to real estate, which has been losing value.