Chinese manufacturing decline: Fastest drop since September '22
Chinese manufacturing activity in May experienced its fastest decline since September 2022. The PMI index, which measures the economic health of China's industrial sector, was at 48.3 points in May, compared to 50.4 points at the end of the previous month, according to calculations by Caixin Media.
Chinese industrial production shrank in May at the fastest rate since September 2022.
The PMI index, indicating the economic condition of China's industrial sector, was at 48.3 points in May, compared to 50.4 points at the end of the previous month, as reported by Caixin Media. Analysts had expected the index to be 50.7 points.
"The job market remained grim, with employment shrinking for the second straight month and at the fastest clip since January," CNBC reports.
In response to these results, Chinese policymakers introduced a series of measures to stimulate the economy and support businesses affected by American tariffs. This includes, among other things, lowering interest rates and reserve requirements for banks, adds CNBC.
US-China trade war
In May, Beijing and Washington agreed to suspend tariffs on each other for 90 days. The agreement, described by the media as a temporary truce in the trade war, was reached after bilateral ministerial talks in Geneva.
As part of the solution worked out at the time, Washington and Beijing agreed to temporarily reduce tariffs—the US from 145% to 30% on Chinese products, and China from 125% to 10% on American products.
At the end of May, Donald Trump stated on his social media platform Truth Social that the tariffs he imposed practically cut China off from the American market, which was "devastating" so he had "made a FAST DEAL" to save them from "what I thought was going to be a very bad situation".
"The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US," the president assessed, without specifying what consequences he plans to draw against the PRC.
