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China’s Manufacturing Contracts for Third Straight Month as U.S. Trade Framework Progresses

China agreed with the United States to advance detailed measures in their May trade framework.

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A general view shows West Kowloon Cultural District and skyline buildings during sunset in Hong Kong, China October 28, 2022. REUTERS/Tyrone Siu/File Photo
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FILE - Shipping containers are seen ready for transport at the Guangzhou Port in the Nansha district in southern China's Guangdong province, April 17, 2025. (AP Photo/Ng Han Guan, File)

Overview

  • The National Bureau of Statistics reported the official manufacturing PMI at 49.7 in June, a slight rise from May’s 49.5 yet below the 50-point threshold for expansion.
  • The production sub-index increased to 51 and the new domestic orders gauge climbed to 50.2 while factory employment and inventory readings fell to 47.9 and 48, respectively.
  • A private Caixin/S&P Global survey showed factory activity returned to growth with its PMI jumping to 50.4 in June from 48.3 in May.
  • Consumer prices dropped 0.1% in May and the producer price index saw its steepest decline since July 2023, contributing to a 9.1% year-on-year plunge in industrial profits.
  • Under the updated trade framework, China will review export applications for controlled items and the U.S. will lift certain restrictive measures according to a commerce ministry statement.