China's manufacturing sector slowed down in June as firms faced increased production costs and lower export orders amid an escalating trade dispute with the United States.
The Caixin Manufacturing PMI fell from 51.1 to 51.0 points to match market expectations. It should be noted that the index stabilized at the 50 level for the 13th month in a row. A sub-index of output rose to 52.1 in June, the highest level in four months, despite slowing growth of the new system, companies chose to sell existing stocks instead of re-stocking.
Exports shrank for the third month in a row to settle near two-year lows. This comes as concerns over escalating trade tensions with the United States, China's biggest export market, increase uncertainty over the manufacturing sector in the coming period as domestic demand is struggling.
