China’s manufacturing activity contracts for a third month amid deflation woes
In Guangzhou, Guangzhou, Guangdong, South China, workers who produce clothes at a textile factory that supplies clothes to quick-fashioned Shein.
Jade Gao | AFP | Getty Images
China’s production activity signed a contract for a third month in June, an official survey showed on Monday, and fueled the effect of ongoing trade cuts.
The Official Purchasing Managers Index (PMI) rose from 49.5 to 49.7 in June in May, but remained under 50 stalls separating the expansion without contraction. This figure was compatible with the estimation of analysts in a Reuters survey.
The out -of -production PMI, which includes service and construction, rose from 50.3 to 50.5 in May.
Chinese manufacturers are struggling with a deep price war between a supply glut and sluggish consumer demand that worsened by higher US tariffs that dwarf the world’s largest consumption market.
The country’s shipments to the United States fell by 34.5% in May and 21% in April, because the exporters returned to alternative markets to avoid a three -digit tariff before the exporters returned to mid -May.
Chinese Prime Minister Li Qiang said that Beijing increased the efforts to increase the domestic demand that would make China a “consumption power center” at an address in an important economic forum in Tianjin last week.
Consumer prices were also united this year and fell by 0.1% in May compared to the previous year.
An indicator on wholesale prices or manufacturer price index has seen the biggest decline since July 2023 in May and deepened a deflation of the production sector for more than two years. The profits of Chinese industrial companies fell by 9.1% in May and the sharpest decreases in seven months.
On Friday, the Chinese Ministry of Commerce stated that Beijing’s current trade framework has reached an agreement with Washington about more details and that China would review and approve the appropriate applications for controlled elements of controlled elements, while the United States will cancel a series of restrictive measures against China.
While the statement is seen as an encouraging sign that bilateral trade negotiations are progressing, the economists warned Beijing that the lack of details, including the criteria that Beijing will use to evaluate the application for exporting rare earth magnets, leaving much doubt.
Wendy Cutler Vice President of the Asian Community Policy Institute, with the latest development signal showing that both sides are working to ensure that the preliminary agreement adopted in Geneva is “in good faith”, “this,” he said. “He said.
One separate expression During the weekend, the Ministry of Commerce reiterated its opposition to other countries that require tariff assistance with the US in any agreement that would endanger China’s interests. “If such a situation occurs, China will not accept it and will take decisive counter measures to protect its legitimate rights and interests.” He said.
According to the Reuters survey, a special survey on the production activity carried out by Caixin Media and S&P Global of China is expected to rise from 48.3 to 49 in June on Tuesday.
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