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The Chinese production activities that were contracted in June in June, according to official data, which emphasize the pressure on policy makers to stimulate domestic demand after a fragile trade water for the US.
The index of the production managers of the production in June was 49.7 in June, data from the National Bureau of Statistics showed an improvement of the lecture of 49.5 by May on Monday, but still under the 50-mark that separates expansion from contraction.
The production of Chinese PMIs – a monthly survey that offers an early glimpse of economic activity – became negative in April as an escalating trade war with the US Rorofs to levels up to 145 percent.
A ceasefire signed between Washington and Beijing last week reduced those taxes, but the second largest economy in the world is still confronted with an uncertain trade outlook while it is fighting to improve consumer demand in the shadow of a delay in property and deflation.
The growth of the consumer price in China has fallen for four consecutive months to May. “The larger reflection is the domestic question,” said Wang, China director at the Eurasia Group. “Deflatie in China, the price war in different sectors is intensifying”.
Export to the US in May fell the most since the start of the Coronavirus Pandemie, although the total export, a critical growth motor that received weakness in the real estate sector, continued to rise.
The PMI data showed some signs of improvement. The figure for new export assignments was 47.7 in June, still in a contract area but considerably above April, when they fell to the lowest level since the end of 2022.
Zakun Huang, China Economist at Capital Economics, said that the export assignments were probably “a reflection of a rebound in the American question after the trade watt of the US china”. A break of 90 days before American rates on dozens of other countries will also be canceled on Wednesday next week.
The retail trade in China unexpectedly jumped in May, according to NBS data, but the concern about consumer demand continues to stimulate the expectations of stimulus. Authorities have repeatedly reduced the rates and tried to increase trust in a housing sector, where house prices are still falling and signs of a recovery lost in May.
“Policy makers [are likely to wait] and check the development of [the] Trade war, ”said Zhiwei Zhang, chief economist at Pinpoint Asset Management, pointing to improvements in export.” Deflatoid pressure is persistent and the labor market is under stress, “he added.
The non-production PMI was 50.5 in June, an increase of 50.3 a month earlier. The general level was increased by an increase in the PMI of construction, which reached 52.8. Composite PMI about production and services was 50.7.
Huang said that composite PMI was still under that of the first quarter in the second quarter.
“This is consistent with a delay of a quarter-on-quarter in GDP growth,” she said. “We doubt that the second half of the year will be much better, with weaker export and reduced tax support that probably weigh at Momentum”.
