China’s factory activity contracted in July for a third month amid a tariff war with Washington and weak domestic demand.
A monthly index released Wednesday by an industry group, the China Federation of Logistics & Purchasing, stood at 49.7 on a 100-point scale. That was up 0.3 points from the previous month but still below the 50-point mark that shows activity contracting.
The data indicate China’s economic downturn was slowing, said a logistics federation statement. But it said the economy still faced “downward pressure.”
Chinese exporters have been hurt by President Donald Trump’s tariff hikes in a dispute over Beijing’s technology policies and trade surplus. Consumer demand also has weakened, hurt by uncertainty about China’s economic outlook.
China’s economic growth fell to 6.2% over a year ago in the quarter ending in June, its lowest level since 1993.
U.S. and Chinese trade negotiators met Wednesday but economists said an early breakthrough was unlikely.
The manufacturing decline “will continue in 2019 until the trade and technology negotiations make some progress,” said Iris Pang of ING in a report.
Chinese leaders have tried to shore up economic activity by pumping money into building highways and other public works. That has supported demand for construction materials but failed to reverse the overall downturn.
Exports of Chinese goods to the United States fell 7.8% in June from a year earlier. China’s global exports sank 1.3%.