Chinese manufacturing activity contracts amid U.S. trade war
Add Axios as your preferred source to
see more of our stories on Google.
Chinese manufacturing activity fell into contraction in May for the first time since December, data released overnight on Thursday showed.
The big picture: It's the latest major piece of Chinese economic data to sink. Exports fell in April, the country’s retail sales drifted lower, and industrial profits slumped.
Details: The official manufacturing Purchasing Managers’ Index (PMI) reading was 49.4, lower than economists polled by Reuters had forecast, and down from last month's reading of 50.1.
- "Obviously, the investor concern is now shifting from the sustainability of Chinese growth recovery to how fast the economy is slowing," Jian Chang, chief China economist at Barclays Asia Pacific said on CNBC’s "Street Signs."
- The most recent U.S. tariff hike "clearly played a role in driving down China's orders and demand and also consumer and business sentiment."
What's next: "The Chinese slowdown we’ve seen happening, even before the concerns around trade, has really impacted Europe" where manufacturing PMI growth has been deteriorating for 3 straight months, Emily Roland, Head of Capital Markets Research at John Hancock Investment Management, tells Axios.
- "I think until you see that turn around I don’t see a major rebound overseas. ... China is the linchpin to all of it."
Go deeper: China has stopped buying U.S. soybeans as trade war rages
