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China’s factory activity grew more slowly in June, Caixin survey shows

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Official and private surveys showed China’s factory activity slowed in June 2023 as growth momentum stalls in the world’s second-largest economy.

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China’s factory activity grew more slowly in June, a private-sector survey showed on Monday, corroborating official data last week that pointed to stuttering growth in the world’s second-largest economy.

The Caixin/S&P Global manufacturing purchasing managers’ index slipped to 50.5 in June from 50.9 in May. Economists expected the reading to hit 50.2 for June, according to a Reuters poll. The 50-point mark separates expansion from contraction.

China’s National Bureau of Statistics released data last Friday that showed the country’s official manufacturing PMI coming in at 49.0 in June — compared with 48.8 in May.

“A slew of recent economic data suggests that China’s recovery has yet to find a stable footing, as prominent issues including a lack of internal growth drivers, weak demand and dimming prospects remain,” said Wang Zhe, senior economist at Caixin Insight Group.

“Problems reflected in June’s Caixin China manufacturing PMI, ranging from an increasingly dire job market to rising deflationary pressure and waning optimism, also point to the same conclusion.”

Some of these problems include business confidence in China in June hitting an eight-month low. Input prices also fell at their quickest pace since January 2016, due to weaker-than-expected demand along with improved supply.

The Caixin survey also found that the marginal manufacturing growth in June was largely driven by improved domestic sales, as new export business was broadly unchanged as weak economic conditions dampened foreign demand.

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The Caixin manufacturing PMI surveys around 650 private and state-owned manufacturers that tend to be more export-oriented and located in China’s coastal regions, while the official PMI surveys 3,200 companies across China.

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