BEIJING (Reuters) - Growth in China’s manufacturing sector slowed in June after a better-than-expected performance in May, official data showed, as escalating trade tensions with the United States fuel concerns about a slowdown in the world’s second-biggest economy.
The official Purchasing Managers’ Index (PMI) released on Saturday fell to 51.5 in June, from 51.9 in May, but it remained well above the 50-point mark that separates growth from contraction for a 23rd straight month.
Analysts surveyed by Reuters had forecast the reading would dip marginally to 51.6.
The findings are in line with recent data including credit growth, investment and retail sales pointing to slowing growth in China’s economy, as policymakers navigate debt risks and a heated trade row with the United States.
Significantly, the June new export orders index contracted for the first time since February, dropping to 49.8 compared with 51.2 in May.
A production sub-index fell to 53.6 in June from 54.1 in May, while a new orders sub-index declined to 53.2 from 53.8.
After May’s factory survey which touched an eight-month high, there have been increasing signs that China’s economy is finally slowing.
Credit growth has slowed this year as the government cracks down on many types of lending, and the tighter liquidity environment appears to be impacting growth.
Industrial output, retail sales and fixed asset investment all missed expectations in May as car sales dropped, and local governments scaled back building projects amid scrutiny from Beijing over their borrowings.
UNCERTAINTY OVER TRADE
While the economy could likely handle these domestic challenges without growth slowing dramatically, the trade dispute with the U.S. is adding to uncertainty
