PMI for June comes in at 49.4, but might re­bound: an­a­lyst

Global Times US Edition - - BIZUPDATE - By Xie Jun

China’s man­u­fac­tur­ing sec­tor re­mained un­changed on a monthly ba­sis in June, show­ing that the sec­tor sta­bi­lized af­ter a slide in May, of­fi­cial data showed on Sun­day.

One ex­pert sug­gested that the pos­i­tive turn in the China-us trade re­la­tions should drive up do­mes­tic man­u­fac­tur­ing in the next few months.

The of­fi­cial man­u­fac­tur­ing pur­chas­ing man­agers’ in­dex (PMI) came in at 49.4 in June, the same as in May, ac­cord­ing to data from the Na­tional Bureau of Sta­tis­tics re­leased on Sun­day.

The read­ing dipped by 0.7 points in May com­pared with 50.1 in April.

Liu Xuezhi, an econ­o­mist at the re­search cen­ter un­der the Bank of Com­mu­ni­ca­tions, told the Global Times on Sun­day that judg­ing by the fig­ures, the man­u­fac­tur­ing sec­tor re­mained “weak” as a re­sult of slug­gish de­mand at home and abroad.

The Bank of Com­mu­ni­ca­tions’ re­search team had fore­cast the June PMI would come in at 49.8.

But Liu said that the PMI should re­bound in the next few months as the China-us trade ten­sions are ex­pected to come down as the two gov­ern­ments have agreed to restart their talks.

Top lead­ers from China and the US reached an agree­ment dur­ing the just-con­cluded G20 sum­mit in Osaka, Ja­pan to restart their trade con­sul­ta­tions, and the US side said it won’t im­pose new tar­iffs on im­ports from China, Xin­hua re­ported.

Ac­cord­ing to Liu, do­mes­tic tax reduction poli­cies that were im­ple­mented from April will also help boost mar­ket con­fi­dence.

But he cau­tioned that an above-50 PMI read­ing is still “not easy to achieve”.

Yang Chang, an econ­o­mist at the re­search cen­ter un­der Zhong­tai Se­cu­ri­ties, told the Global Times on Sun­day in a state­ment that the short-term PMI con­trac­tion in re­cent months might push the elim­i­na­tion of back­ward ca­pac­ity.

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