Overview

• China’s official manufacturing PMI rose to 49.7 in June but remained below the 50 threshold for a third consecutive month as production and domestic orders inched above 50.
• Factory employment and inventory levels continued to decline, with subindexes at 47.9 and 48 respectively, reflecting subdued operational conditions.
• Consumer prices dropped 0.1% in May and producer prices fell to a near 12-month low, deepening deflationary pressures on industrial margins.
• The Caixin/S&P Global PMI climbed to 50.4 in June, marking a return to growth driven by higher new orders despite export demand staying below expansion levels.
• Economists are proposing targeted fiscal measures, including consumer vouchers and trade-in schemes, to boost domestic demand and stabilize the manufacturing sector.