China’s Manufacturing Sector Eased down in June amid Escalating Trade War

The manufacturing sector of China muted slightly in June following the unexpected rally in May due to strong industrial profits last months that the could help concerns on sudden economic weakening.

Moreover, the large factory sector of the country is expected to face some problems concerns tariffs and worsening trade dispute between the two top nations of China and the U.S. scheduled to be imposed on 6th of July.

The official manufacturing PMI is declining to 51.6 in June from 51.9 in the previous month, based on the median forecast of 25 economists on Reuters poll. The 50-mark separates expansion from contraction on a monthly basis. This signifies growth in China for almost two years driven by strong housing and high global demand for Chinese exports and the rebound of commodity prices.

Although, there is a slight uncertainty regarding the probable risks in the outlook in the background of softer credit expansion and domestic demand from government-funded infrastructure investment for consumer spending also weakened.

Imposition of tariffs by the U.S. President Donald Trump on $50 billion of Chinese imports, with risks to further $400 billion more raises concern on the bigger economic impact the trade war.

The private Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) is anticipated to slightly decline to 51.0 in June compared to 51.1 in May.

The official PMI survey is scheduled to be published on Saturday, as well as other similar surveys on the services sector. Meanwhile, the private Caixin manufacturing PMI and the Caixin services PMI will be released on 2nd and 4th of July, respectively.