Chinese shares closed higher Friday as Beijing's top policymakers pledged stronger economic support, reassuring investors despite weak manufacturing data.
The Shanghai Composite Index, the main gauge of Chinese stocks, closed 0.7% higher to 3,832.26. The Shenzhen Component Index jumped 2.2% to 13,578.93.
China's top policymakers signaled stronger economic support, reaffirming a more proactive fiscal policy and a moderately accommodative monetary stance as Beijing seeks to shore up growth against persistent domestic and external headwinds.
At a meeting of the Political Bureau of the CPC Central Committee, officials pledged to speed up fiscal spending, stimulate domestic consumption and advance the "AI Plus" strategy to accelerate the development of smart industries. They also called for deeper reforms to the capital market's investment and financing framework to strengthen resilience and restore investor confidence.
The policy commitments outweighed weak economic data released on Friday. China's official Composite PMI Output Index slipped to 49.3 in July from 50.6 in June, marking the weakest reading since December 2022 and signaling a contraction in overall business activity.
Manufacturing activity shrank for the first time in five months, with the official PMI falling to 49.2, while the non-manufacturing PMI also slipped into contraction at 49, ending a two-month expansion.
In company news, Espressif Systems Shanghai (SHA:688018) posted second-quarter attributable net income of 198.6 million yuan, up from 167.6 million yuan the previous year. Shares of the fabless semiconductor maker closed 12% higher Friday.