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Concerns are rising over China&#39;s economy amid rising number of Covid 19 cases and increase in raw material costs. <a href="https://www.aljazeera.com/economy/2021/8/2/oil-slips-on-worries-of-a-china-slowdown-jump-in-opec-output">Al Jazeera</a> reported that oil prices dropped after China&rsquo;s factory activity grew at a slower pace in July.</p>
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The news organisation in a report said that China&rsquo;s factory activity growth slipped sharply in July as demand contracted for the first time in more than a year.</p>
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According to news agency <a href="https://www.reuters.com/world/china/chinas-factory-activity-expands-slower-pace-july-official-pmi-2021-07-31/">Reuters</a>, the official manufacturing Purchasing Manager&#39;s Index (PMI) eased to 50.4 in July from 50.9 in June, data from the National Bureau of Statistics (NBS) showed. Remaining above the 50-point mark, however, separates growth from contraction, it said.</p>
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<strong>Also read: <a href="https://www.indianarrative.com/economy-news/engines-of-china-s-growth-the-local-governments-stare-at-financial-crisis-104060.html">Engines of China&#39;s growth — the local governments– stare at financial crisis</a></strong></p>
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Higher input costs along with unfavourable weather conditions are among the reasons for the slower factory output.</p>
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&ldquo;China&#39;s economy has largely recovered from disruptions caused by the pandemic, but manufacturers are grappling with new challenges from higher raw material prices, surging logistics costs and global supply chain bottlenecks,&rdquo; Reuters said.</p>
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Analysts have said that rising raw material costs have become a cause for concern.</p>
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&quot;China has been grappling with rising costs. This has been a cause for concern for sometime now, it is not new as such,&quot; an analyst told India Narrative.</p>
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<a href="https://www.scmp.com/economy/china-economy/article/3134768/chinas-factories-decry-surge-raw-material-prices-they-cut">South Morning China Post</a> in May noted that a wave of shutdowns and temporary production stoppages is sweeping through a number of factories in China&rsquo;s southern manufacturing hub as the surging cost of raw materials eats away at profits and raises concerns over inflation risks in the world&rsquo;s second-largest economy.</p>
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